Many wealth management firms could be exposing themselves to significant risk without even realising it. They might not realise how dependent they are on it, but open-source technology is widely used across modern businesses, and failures could affect firms that unknowingly rely on it.
Open-source software is made available to the public so anyone can inspect, modify and improve its source code. This type of technology is the backbone of a lot of systems and infrastructure available online. In fact, a report from OpenForum Europe claimed that over 70% of modern software depends on open-source software and its components.
As Prometeia Country Head Switzerland Carmine Cammarota noted, the adoption of digital and cloud technologies is making the banking sector, particularly wealth management firms, increasingly reliant on open-source components. Worryingly, they might not even be fully aware of how dependent they are.
Cammarota said, “This use isn’t always obvious: a bank may be an indirect consumer of open-source software through SaaS services, for example, or cloud infrastructures that incorporate numerous open-source components. It’s an evolution that brings benefits but also raises concerns such as security and vulnerability management. A vulnerability present in an open-source component can, in fact, propagate throughout the entire technology chain.”
The reason many wealth managers are unaware of how much they rely on open-source software is that these dependencies are inherited, not chosen, EXANTE CTO Richard Forss explained. He added, “A wealth or asset manager rarely picks a serialisation library. It picks a custodian, a portfolio system, a broker, a reporting vendor, and each of those brings its own stack.
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