Morgan Stanley and EPAM Systems Contribute to Finos Open Source Movement

In the two years since its founding, the Fintech Open Source Foundation (Finos) has gone from a community dominated by small, cutting-edge fintechs to a playground for major sell-side institutions and their own big ideas.

Finos is a nonprofit whose mission is to promote the adoption of open-source software and open standards in finance. Through the organization, companies and individual developers (through GitHub, a Finos platinum member) contribute the source code for tools they’ve built to the community, allowing that community to build apps on top of that tool. When enough people and companies are using the same underlying code and tools, that, in turn, can standardize processes across the industry. More than half of the contributions to Finos since the beginning of the year have come from banks, says Gabriele Columbro, Finos founder and executive director.

Among the newest of open-source projects contributed to the organization is Morgan Stanley’s Morphir, a twist on the kind of tool known as “low-code,” the main premise of which is that software developers can achieve more functionality while writing less code. Using computer science techniques mapped to real-world business problems, the tool generates its own code representing those logical connections, and that code can be implemented within another platform, regardless of the codebase it’s written in, says Andrew Robinson, head of funding and finance technology at Morgan Stanley.

“Morphir, at its soul, is a transparency and efficiency tool for both users and developers,” he says. “And the magic of Morphir is that it provides separation of the representation of the core business logic from that implementation, so we can separate what we are doing from how we are doing it.”

Plainly stated, Morphir has allowed the bank to automate software development, while focusing on ensuring that the platform or app under construction understands the context of the business problem; for example, the definition of an investment-grade bond (bonds rated BBB- and above).

“Suppose we need a standard way to represent what an investment-grade bond is across multiple applications. Morphir provides a very concise and simple way of representing that core logical concept. It separates that core logical concept of what’s investment grade versus what’s not investment grade from the programming language you’re choosing to implement the underlying application in,” Robinson says.

Morphir has standardization implications for systems that operate in the other highly manual and logical areas of finance, like smart contracts, pricing and regulation—which Finos’ Columbro is excited by, calling Morphir a “cool technology”.

Expanding Reach

It’s the kind of cool that Columbro hopes will entice the buy side to become Finos members and contribute their own projects. Other than AQR Capital Management, a Finos silver member, buy-side membership within Finos has been lacking. In speaking to WatersTechnology in May, however, Columbro said that was beginning to change, particularly with the contribution of Goldman Sachs’ Pure Alloy, which spawned a handful of working groups with buy-side participants who were using Alloy for different data-modelling projects.

A second new contribution to Finos marks another stride toward bringing the buy side onboard. EPAM Systems, an enterprise software development, design, and consulting firm, has open-sourced GLUE, one of its proprietary systems, with Finos for the first time. GLUE is the underlying data model for its Wave ecosystem for asset and wealth managers.

Wave is a set of components that allows managers to automate large portions of their advisory process, such as setting parameters around investment goals, risk tolerance, and performance. GLUE holds it together, serving as a common semantic layer to all components. It provides a model to support hierarchical client, security, and portfolio data structures, as well as complex legal entity relationships common to the industry.

Financial services as a whole accounts for about 25% of EPAM’s total revenue; it is not a fintech, but has been a member of the Linux Foundation—a broader open-source consortium—for years and has contributed more than 50 open-source projects to various outlets, though this is their first contribution specifically to the financial domain, says Panos Archondakis, head of banking, wealth and asset management for EPAM.

Its contribution signifies that Finos (which also joined the Linux Foundation in April), despite its fintech and Wall Street roots, is gaining footing outside the thin line that separates the buy and sell sides.

“While I’m not ready to make any formal statement as to where Finos is going to be, we certainly are seeing that the journey and the successes that we’ve experienced can be applied to other adjacent fields for sure,” Columbro says.