Open source software is a driver of the democratization of technology, opening doors, and leveling the playing field for many industries. However, financial services has been a rare exception: financial institutions have tended to rely on their own technology development and operation.

In a sector that has traditionally served the few and not the many, open source could be the key to make financial services more inclusive for the 2 billion people and 200 million small businesses around the world lacking access to basic services such as banking and lending.

In a report published by Gartner, global enterprise IT spending in the banking and securities market was estimated to have grown by 4.6% in 2018 in constant US dollars. Banking and securities firms remain steadfast as they continue to prioritize digital transformation. But it has largely been major global banks that have the resources and ability to throw their hats into the ring of technology development—smaller regional banks have tended to stay on the sidelines.

Smaller banks, such as those based in developing countries and rural regions, lack technical expertise and have trouble affording the capital expenditure needed for modern IT infrastructure, such as next-generation databases, advanced distributed computing architecture and financial-grade artificial intelligence. However, if they gain confidence to tap lower-cost and more collaborative open source innovations, they will be able to serve their markets better.

A promising step in this direction is growing participation in the Fintech Open Source Foundation. Members include ten of the 30 biggest US banks by assets under management, including Goldman Sachs and JPMorgan.

For the same reasons, Ant Financial’s Alipay has joined the Cloud Native Computing Foundation as a Gold Member, hosting critical components of cloud native software stacks, including Kubernetes and Prometheus. By sharing our technical knowledge with the Silicon Valley-based CNCF, a leading open source organization under the Linux Foundation, and our fellow members, Alipay is committing to contributing and opening its technology to financial institutions and partners across the globe, while working with many regional and rural banks in China, to help their digital transformation through the products based on readily available open source technologies.

Alipay was founded in 2004 as a safe and trustworthy service to facilitate payments during a time when there was no such option in China. It has since evolved and scaled to provide millions of small and micro businesses with a variety of services, including payments, microloans, and insurance, among others.

We have already brought technology benefits to the industry, creating efficiencies, and lowering costs at more than 200 financial institutions, including more than 100 banks, over 60 insurance companies, and more than 40 asset management firms and security brokers across China.

From years of experience serving mission critical financial applications like Alipay, we have created various open source projects such as Ant Design, a popular UI design language, and Scalable Open Financial Architecture Stack (SOFAStack), which plays a critical role in enabling customers to participate in the 11.11 Global Shopping Festival, the world’s largest shopping festival by transaction volume.

With SOFAStack, businesses large and small are able to leverage the scale and reliability of Alipay’s payments platform so they can focus on serving their own customers on the busy shopping day.

By making SOFAStack open source, we have enabled partners, such as the Bank of Nanjing, to build their own robust technology systems. The Bank of Nanjing recently built a next generation core banking system known as Xinyun Plus for itself and its third-party partners, with the help of SOFAStack and other open source technology from Alipay.

With its high performance, flexible scalability, strong consistency, and disaster recovery capabilities, Xinyun Plus signed up nearly 10 million new customers by the end of 2018, including small and medium-sized enterprises, with its daily capacity to process loan applications increasing tenfold from 100,000 to 1 million. The bank was also able to speed up the review process for loan applications, with some customers receiving approval in less than one second. The management cost for a single account fell by 80 to 90%.

Benefitting from open source technologies, Xinyun Plus brings customers better user experiences while accelerating technology iteration and innovation.

Last year, open source software celebrated its 20th anniversary. For its next ten years, the newest and most crucial application of open source may lie in transforming financial services to make them more accessible for people around the world.

Ant Financial and our open source projects are excited to be part of this global technology community, and we hope it will bring more equal opportunities to the world.