Writer: OLUWAFIROPO TOBI OGUNDARE, Territory Sales Lead for Mauritius and West Africa at Red Hat
The growth of the cloud computing market and increased availability of IT and managed services means Nigerian enterprises and institutions are investing in infrastructure and business digitalisation.
According to the Nigerian Bureau of Statistics (NBS), Nigeria’s ICT sector contributed 19.54% of the country’s GDP in Q2 2023 and has enjoyed a year-on-year growth rate of 8.6%.
We were also the leading destination for African tech startup funding in 2022. According to the African Tech Startups Funding Report, 180 Nigerian startups raised a combined $976 million, representing 29.3% of the continent’s total funding.
At the same time, many enterprises are working to refresh their existing infrastructure and applications.
After all, modernisation leads to the adoption of novel technologies and opens the door to new possibilities.
But, with modernisation comes a shift away from traditional IT systems and models, for instance, moving from a monolithic architecture to microservices.
It’s an existential shift and may be daunting, but it revolutionises how enterprises, including banks and financial service providers, approach application development and lets them leverage the full potential of the cloud.
The traditional approach
The basic premise of monolithic architecture is that it is designed to be self-contained. All components and functions are tightly coupled, meaning they must all be present for code to be executed and software to run. This proved appropriate when, at the dawn of the computer age, technical limitations meant software was written in low-level languages and ran on a single machine.
This kind of design does have its advantages. For one, monolithic software has better throughput than modular applications. It’s more straightforward to develop during the early stages of its lifecycle; can be easily deployed by copying the packaged application to another server; and, thanks to a single codebase, is simpler to configure, manage, and monitor for application performance.
Monolithic architecture is optimal when enterprise applications are simple and lightweight. However, today’s applications can be far more complex and have multiple functions with frequent code changes. Not to mention, people and businesses are using them more than ever before, which impacts their scalability requirements.
Breaking things down
The shift away from monolithic architecture is best exemplified by high-profile cases and a change in global digital trends. For instance, as it transitioned away from being a DVD renting service to a digital content streaming service, Netflix migrated its IT infrastructure and replaced monolithic architecture with microservices hosted on the public cloud. Given the number of subscribers it now enjoys, Netflix’s digital platform needs to be both highly efficient and scalable.
Microservices architecture entails splitting an application into specific services, each running a unique process and usually managing its own database.
They are often decentralised and have few dependencies, using application programming interfaces (APIs) and API gateways to communicate.
This enables developers and operation teams to work in tandem and not compromise the work of the other, which means improved development and turnaround times.
A major benefit of microservices is the ability to isolate faults. If a service suffers a problem, it can be isolated, tested, and redeployed without affecting the rest of the application. Microservices architecture also represents a cloud-native approach to building software.
Thanks to Nigeria’s growing cloud computing market, enterprises can access new digital capabilities.
Microservices in banking
Modular application development offers many benefits for Nigerian businesses. Shortened development cycles mean you can deploy and update your applications more quickly.
They can be scaled according to the size and needs of your organisation, and independent services do not impact one another in the event of faults, thus increasing your application’s resiliency.
These benefits extend across business sectors, particularly when it comes to those providing essential public and corporate services.
For example, let’s say a bank or financial service provider wants to modernise its IT system. While legacy banking systems serve an important purpose, many of them weren’t designed for the digital and data demands of today’s market and users. For example, Africa is set to be the fastest growing fintech region in the world, with a projected market value of $65 billion by 2030.
A company-wide transition to microservices enables the bank to accelerate integration with third parties, all while minimising risk to their active operations.
This is very relevant to Nigeria as we lead the rest of the continent in open banking. Earlier this year, the Central Bank of Nigeria (CBN) approved regulations and guidelines for open banking regulations for banks to share customer data with third-party financial institutions via APIs.
Banks can introduce and offer new features to their customers, implement simpler versions of existing features, and make changes to them more efficiently.
Microservices offer a lot of advantages, but not every organisation is ready for or suited to this approach to architecture.
Organisations should engage their enterprise IT vendors to determine the best setup to meet their business and digital needs.
By laying the proper foundations, Nigeria’s institutions can stand the test of time and thrive in a digital-first future.
