I recently had the opportunity to participate in a panel discussion at the O’Reilly Money:Tech conference. We discussed the extent that the financial technology community had embraced open source. Other members of the panel were Tim O’Reilly of O’Reilly Media, James Altucher who founded StockPickr, and Graham Miller of Marketcetera. I was representing free financial open-source software developers in my role as founder and project lead for the QuickFIX/J project.
There’s no question that open source technology is used widely in financial applications, especially for middle components. However, there was also a discussion about how willing the financial companies are to open source their own technology (where "technology" might include algorithms and research rather than just software).
I don’t believe any company intends to sacrifice a competitive advantage by converting their technology to open source. For that reason, I doubt that we’ll see financial companies releasing algorithms or proprietary research. However, financial companies are involved in open source in a variety of roles. The user role is probably most common today, but a few financial companies have contributed to open source. One example is the Advanced Message Queuing Protocol (AMQP) effort started by JP Morgan and others. This technology benefits financial software (and software from other domains) by provides a programming language-independent and vendor-independent wire protocol for message queues. For this technology to be successful it must be widely used. An open source strategy has a clear advantage here.
Another example is the Open Financial Market Platform (OFMP) which has recently become an Eclipse Foundation project. In this case, I’m not so clear about the benefits to the company contributing the initial code. Maybe someone from the project will comment.
Tim O’Reilly closed the panel with a suggestion that open source developers consider projects that make it easier to capture and process the vast amounts of unstructured data available on the net.