Why Financial Services Is Turning to Application Engines to Accelerate Development

Hey guys, thanks for the throw. We're here with Robert Cook, who's the CEO at three Forge, and we're having a little chat about, well, app engines is specifically how they're being used in the finance industry, but I suspect they might be applicable elsewhere as well. Robert, welcome to the show.

Hi, Mike. Great to be here. Thanks for having me on today.

So, level set this for everybody. I think everybody's familiar with application development and they have platforms and tools, but what exactly is an app engine and what's different about that approach than what we have been doing? Right, okay.

Well, so app engines have actually been around for quite a while. They've been used in other industries, just not in finance so much. Um, so an application engine, the definition will vary a little bit depending on who you ask.

Uh, but the definition I, I like to go with is if, first off, it's an engine for running an application, but the distinction is it's also a workbench or integrated development environment for building applications. So it's not just about the ability to run an application, it's also about being able to build and maintain applications. Um, and if you'd like, maybe I'll start off with just an analogy, um, within the gaming industry, because that's where application engines have been used for quite a while.

Sure, go ahead. Okay. Right.

So, uh, so first off, uh, if you look within the gaming industry, obviously the gaming industry is, is is a mature industry. Been around for, for quite a while. Um, just as a quick aside, that's where I kind of cut my teeth.

That's what got me into, um, building high speed systems, was trying to always fight the CPU and see how, you know, eke out that extra little bit of performance by building tighter code. But with that said, um, if you look at the way video games are built today, whether there's something, a handheld device or something that's, you know, running on a desktop or your Xbox, whatever it happens to be, your console, uh, inevitably that is running on an application engine. Um, there's a few big engines out there on real, uh, and, and so on.

Um, I won't go tell the details out, but there's a few application engines out there, and any video game you play, there's about a 95% chance it's built on one of those application engines. And if it isn't, it's probably been built on an homegrown internal application engine, like something like EA sports. So, uh, so stepping back, if you wanted to build a new video game, you would not sit down and start to build a 3D environment and then say, I'm gonna build my own physics engines, I'm gonna build all the logic for non-player characters, things like that.

What you would do is you would take one of these application engines and then you would start, you'd think about, well, I wanna build a 3D video game. So you'd use a 3D workbench where you would start to lay out these characters in a 3D environment, and if you wanted to change things, you would use that 3D environment to make those changes. This is, I think, very logical.

This is how someone you would envision a video game being built. You're not building it one line of code at a time. You're using an environment that's designed to help you within the environment of the application you're trying to build.

Now, if you look within finance, let's, let's rewind. Pre-application engine, people are using an, uh, languages like Python, Java, c plus plus. These are general purpose languages that are not really designed for finance.

And so the ides, the integration development, or I'm sorry, the, uh, development environments, in which case people in which people are building these applications are also fairly generic sort of environments. Uh, and so really again, what an application engine is, is it's about being able to have an environment that's suited, that's designed for letting you build your use case and run that use case. And that's what makes an application engine so different from any other type of framework.

And why is the finance industry finally coming around to this? And will I see this in other sectors besides gaming and finance? Uh, well, you can see it in other sectors.

Now, uh, government, uh, uses, uh, so palate is very big within the government, um, within IOT, um, that it's also very popular within there. Uh, so, um, uh, general Electric has a product, um, and so does Siemens. There's a few other companies that have an application engine for those different industries.

Uh, you've got Salesforce within retail. Um, and so yes, most industries have a application engine. So I'll go back to kind of the first half of your question is why doesn't, why hasn't finance had it?

Well, I think finance has a unique set of challenges which has made building an application engine, uh, slightly more complex, but still, nonetheless very doable. Uh, so within finance, a we're dealing with very legacy systems and also very new systems. So it needs to be able to kind of cut across both of those.

I'd also say when you get into finance, you have this unique challenge of you're dealing with big data, historical data, but you're also dealing with very real time moving data. Um, and so you need to be able to bridge those as well. And so that's why I think it's been more piecemeal in terms of people building out these solutions instead of thinking about it holistically.

In order to build an application engine within finance, it's a very multidisciplinary, uh, field that you need to be willing to go into, uh, look and feel being able to build front end applications. You have to be willing to also understand, uh, you know, uh, data virtualization layers, what it means to access many different systems, what it means to be able to move, to handle real time moving data, and perhaps most importantly, being able to understand what it means to be able to deal with these sort of regulatory environments and entitlements, et cetera. So being able to kind of bring all those disciplines together, and I haven't really talked about AI yet, which is the new field that, you know, obviously we're, we're putting a lot of attention towards as well.

So if I move to an AMP engine, how does it change the way I think about building and deploying software? And today we have a massive amount of infrastructure around the developers and there's DevOps teams and software engineers and all these folks. So does that get streamlined somehow?

Yeah, well absolutely. That's the whole idea. Um, because right now, first off, when you decide to go with an application engine, you're really saying that you have a part of that is having this, the engine itself, the full stack environment.

Um, so what we mean by full stack is having a database that you can rely on having a his and that, and by the way, I mean a real time database. Um, you also have a historical database. You also need to be able to have a place where you can, uh, have complex event processing, build out your workflows, build out your dashboards, do reporting, integrate with calendars, all of these sorts of things.

And to basically have a one stop shop where you can do that. Um, so right there, in terms of the overhead of code that you need to write drops dramatically because you're no longer having to focus on all the glue code. How does this connect to that and making all these sort of, uh, you know, uh, trying to fit a round peg in a square hole sort of thing.

Uh, basically all of these components have been designed to work together. So that's the first part of where the savings was in. The next part is again, the fact that you have this integrated work bench.

So one of the things that became very clear, uh, when we started kind of getting into the second or third generation of our application engine, let's call this circa 2022, was that as these use cases got more complex, understanding the, uh, dependency and the taxonomy of data became very important. And I'll, I'll, I'll, I'll use numbers, um, uh, as an example here. So let's say you've built a system, you've succeeded in building a system that talks to many underlying, uh, infrastructures.

Let's call it 25. Let's start off with small numbers. So 25 different systems, which is really a lot, I would say for a homegrown solution.

Not a lot for an application engine, but let's just choose 25. So you've got 25 underlying systems that you've now connected to with your application engine. Um, and each system does an update, let's call it once every year.

That still means every other week something is changing, some schema, some set of data, some workflow is changing. And so this application engine needs to be able to dynamically look and understand this system changed. How does this impact things?

How does this impact workflows down the line? And that's actually where I think almost every organization gets stuck. And that's where we've come up with this term technology debt.

Because the technology debt really exists because you wanna change things. If everything was done, if like the highway system was complete, you know what I mean, and nothing ever needed to change, then the technology debt doesn't matter quite so much. The technology debt becomes a big thing because you wanna be changing and you wanna be competing.

And what makes it really hard is that you don't have a good taxonomy and you don't have a good dependency graph of understanding that. So what the application engine focuses a lot on this is where I get back to the workbench part of it is that once you've integrated with all of these systems, you can start to see as systems change, what are the downstream effects of that and what are the upstream effects if I'm going to make a change? Does that make sense?

Yeah. Is this a way to kind of have my cake and eat it too, is I need more structure and more centralization, but I don't wanna be locked into specific platforms. So is that app engine providing essentially a layer of abstraction that kind of does both?

Exactly. And I would say there's another, there's a few other pieces of cake as well. Um, when you go this, which is, uh, you know, you also get this, this added benefit of easy auditability auditability.

'cause one of the challenges, again, when you start looking at the regulatory and the infrastructure side of things is that as you have all of these different systems and these systems are talking to each other and the workflows are cutting across these systems, it becomes very hard to audit and understand where data is flowing. Um, suddenly that sort of processes gets much easier too. So basically as you start to go down this path, the application engine almost becomes this kind of workhorse that not only allows you to build new use cases going forward, but maintain and have visibility into your existing legacy infrastructure.

So Given all that, how much of this is a cultural issue versus a technical issue in these companies? 'cause sometimes I feel like everybody who's on a different development team has selected a different database and done all these other things, but as a result, there's nobody to kind of drive the app engine decision. Well, now you've, you've hit on, uh, the real question here, which is, uh, how much of this is cultural versus technology?

Um, and you know, different organizations have different cultures and different appetites, uh, for how they wanna operate their it, but I think that it is becoming overwhelmingly compelling. Uh, and I think once you start to mix AI with the application engine, it becomes overwhelmingly, overwhelmingly compelling. Um, and look, I think that there is sometimes pushback from the status quo when you wanna change things.

Um, you know, we generally have found much greater success when it comes to coming in with new use cases or use cases that firms have traditionally been struggling with, um, than trying to rip and replace existing stuff. That's just, I guess this just gets a bit into, you know, human nature, right? Self preservation, um, you know, it's, it's a bit, it's a bit difficult.

I, I think we had one of our, one of our best customers, and by the way, you know, five of the largest tier one banks in the world use us for probably somewhere between 501,000 use cases. So we've had a great success at really large organizations that have a hundred thousand plus employees. So we definitely see a lot of success there, but it's also a very different animal.

Um, one of our, one of our tier ones described themselves as, you know, like a huge cruise shed, you know, and it just moves at a certain speed, but once it starts going in that direction, it can move thousands and thousands of people all at once. You know what I mean? And that's, that's what we're seeing.

So it takes a long time to get things going in that direction, but once they get going, it's fairly unstoppable. Um, one of our tier one banks has actually said they are doing almost one use case per day on three Forge. Um, so you know, it, again, it takes a long time to kind of get the, the politics in motion and get things moving.

But again, once people give it a shot, it is, I would call it overwhelmingly compelling. So you mentioned AI a couple of times. Walk us through that a little bit about why AI is forcing this conversation.

Well, forcing this conversation because, well, first off, it's in the news a lot. So people see about it, they know about it, it's affecting markets. Um, and it is, it's a real change agent.

I mean, there's just no other way to put it. It's, it's, it's, it's di it's a disruptor. But this is why I think the convergence of the application engine plus AI is just going to just change the world.

And let me put it this way, AI itself now, anything can change down the road. Different people have different, um, projections as to where things are going and the impact it will have. What I see for the foreseeable future is that when you take core technologies like your operating system, like your, uh, transactional acid compliant databases, um, your web browser, Chrome or Firefox, whatever you happen to use, these are, you know, multimillion line, very complex pieces of software technology.

Those are not going to be replaced by AI anytime soon. Uh, and I understand there's been some academic projects where they've done little bits and bites here, but when we're talking about these broad solutions, AI is not going to replace those. What AI is facilitating though, is the rapid understanding of how those tools work.

And if you don't mind me kind of taking a side here, think of those as tools. Think of an operating system as a tool. It by itself doesn't really do a whole lot.

Again, a browser's a tool. If you don't have a webpage, a browser really doesn't mean a whole lot, right? These are tools, but what AI is very good at is understanding tools and their capabilities and how they work together and basically assisting humans in building solutions on those tools.

So now let's introduce for the audience what an application engine is. And application is the ultimate tool. It's, it's like the fest tool of, I'm sorry, that's, I'm, I'm a, I'm a, I'm a woodworking guy.

That's, that's like a premium bread. It's like, it's like a fest tool of, of software, right? It's basically saying here is a one stop shop that gives you everything you need to build applications as a human without having to write large volumes of code.

And I don't wanna get this confused with low code 'cause that's quite different. An application engine is basically a set of tools allowing you to quickly develop what you need. Then you take that concept and you marry it with artificial intelligence, and now you've got the holy grail.

Because what you have is you have this complete toolbox of everything you need and you've got artificial intelligence which understands how to interact with humans and interact with tools. And then suddenly you have, you have the solution. It's kind of like you have the, it's like you have the factory and you have the robots, right?

And now you're off to the races. All right, well folks you heard in here, app engines are gonna change the way we think about building and deploying software. It's not necessarily a new idea, but it's gonna be an idea that's time has maybe come.

Robert, thanks for that show. Yeah, absolutely. Thank you very much.

All right. And back to you guys in the studio.