6 Best Practices for Banking Applications Development

The banking industry represents a highly dynamic environment for software development due to its high security, complex transaction processes, and large-scale integration requirements. In this context, software design patterns play a critical role in creating a modular and sustainable architecture.

Using the right pattern in the right scenario greatly improves the flexibility, maintainability, and reusability of the software.

In this article, we will discuss some best practices commonly used in banking systems.

Builder Pattern

The Builder Design Pattern is used to facilitate complex object creation. This pattern makes it possible to configure the parameters required during the creation of an object in different combinations.

Since banking applications have objects that are both complex and contain many optional parameters, we can create objects in a flexible and clean way.

@Getter
@Setter
@Builder // Lombok Annotation
public class Customer {
    private String name;
    private String email;
    private String phone;
}

// Usage
Customer customer = Customer.builder()
                            .name("John Doe")
                            .email("[email protected]")
                            .phone("123-456-7890")
                          .build();
 
Customer customerWithoutPhone = Customer.builder().
                            .name("Jane Doe")
                            .email("[email protected]")
                          .build();

Strategy Pattern

A strategy pattern is used to change the behavior of an algorithm at runtime. In banking applications, it is well suited for managing processes that serve the same purpose but have different operations.

For example, different interest rate calculation methods or various payment processing strategies or different reporting management can be easily managed with this pattern.

This pattern ensures that the code is extensible in accordance with the Open-Closed Principle.

Benefits;

1. It is open to development, new algorithms can be easily added.
2. Reduced code duplication and increased readability.

public interface InterestStrategy {
    double calculateInterest(double amount);
}
 
public class FixedInterestStrategy implements InterestStrategy {
    public double calculateInterest(double amount) {
        return amount * 0.05;
    }
}
 
public class VariableInterestStrategy implements InterestStrategy {
    public double calculateInterest(double amount) {
        return amount * 0.03 + 50;
    }
}
 
@RequiredArgsConstructor
public class Loan {
    private final InterestStrategy interestStrategy;
 
    public double calculate(double amount) {
        return interestStrategy.calculateInterest(amount);
    }
}

Factory Pattern

The Factory pattern is used to abstract the object creation process and reduce code repetition. It simplifies the creation of complex objects and allows to dynamically decide which type of object to create.

It can be used in banking applications, especially in the creation of transaction objects and different reporting formats.

Benefits;

1. Manages object creation processes from a central point.
2. Simplifies code maintenance and provides extensibility.

public interface Account {
    void accountType();
}
 
public class SavingsAccount implements Account {
    public void accountType() {
        System.out.println("Savings Account");
    }
}
 
public class CurrentAccount implements Account {
    public void accountType() {
        System.out.println("Current Account");
    }
}
 
public class AccountFactory {
    public static Account getAccount(String type) {
        if ("Savings".equalsIgnoreCase(type)) {
            return new SavingsAccount();
        } else if ("Current".equalsIgnoreCase(type)) {
            return new CurrentAccount();
        }
        return null;
    }
}

It can also be used in combination with the strategy pattern if the structure is complex and cannot be managed with if-else.

Observer Pattern

The Observer pattern is a design pattern in which changes to an object are automatically notified to other objects that depend on that object. It is frequently used in banking systems for notification processes and real-time updates. For example, real-time exchange rate updates.

Benefits;

1. Provides loose coupling between objects.
2. Facilitates updates in an automated and centralized way.

public interface Observer {
    void update(String message);
}
 
@RequiredArgsConstructor
public class Customer implements Observer {
    private final String name;
 
    public void update(String message) {
        System.out.println("Notification for " + name + ": " + message);
    }
}
 
public class AccountSubject {
    private List<Observer> observers = new ArrayList<>();
 
    public void addObserver(Observer observer) {
        observers.add(observer);
    }
 
    public void notifyObservers(String message) {
        for (Observer observer : observers) {
            observer.update(message);
        }
    }
}

Cross-Cutting Concern Management

This management provides a more modular structure by separating cross-cutting concerns from the business logic of the application. Cross-cutting concerns consist of operations that are repeated across multiple modules and require a centralized solution.

Examples include functions such as logging, error management, or security controls. This pattern is common in banking systems, especially in areas such as performance measurement, transaction monitoring, and authorization.

Benefits;

1. Avoids code duplication by managing cross-cutting concerns from a centralized point.
2. Provides a cleaner and easier to maintain architecture.
3. Makes it easier to add new features or update existing functionality.

@Aspect
@Component
public class LoggingAspect {
 
    @Before("execution(* com.bank.service.*.*(..))")
    public void logBefore(JoinPoint joinPoint) {
        System.out.println("[LOG] Method invoked: " + joinPoint.getSignature().getName());
    }
 
    @After("execution(* com.bank.service.*.*(..))")
    public void logAfter(JoinPoint joinPoint) {
        System.out.println("[LOG] Method execution completed: " + joinPoint.getSignature().getName());
    }
 
    @AfterThrowing(pointcut = "execution(* com.bank.service.*.*(..))", throwing = "error")
    public void logException(JoinPoint joinPoint, Throwable error) {
        System.out.println("[ERROR] Method " + joinPoint.getSignature().getName() + " threw: " + error.getMessage());
    }
}

Domain Driven Design (DDD)

Domain-Driven Design (DDD) is an approach that makes it easier to transfer complex business processes to software systems. It aims to build a structure based on real-world business logic and the language of domain experts.

The basic philosophy of DDD is to shape the software development process around business rules and domain objects.

In sectors with strict rules, such as banking, it ensures that the system meets the requirements.

Basic Concepts:

1. Entity: An object that has an identity and is distinguished by that identity. For example, a customer or an account.
2. Value Object: An object that has no identity and is distinguished only by its value. For example, a currency or an address.
3. Aggregate: Allows related entities to be managed as a group. An aggregate represents a unit of business logic and maintains data integrity.
4. Repository: A layer that abstracts data storage and retrieval processes. It facilitates operations on entity and aggregate objects.
5. Service: A layer that encapsulates business logic and works with multiple entities or value objects.

Benefits;

1. Ensures software is compatible with business logic.
2. Creates a common language between teams (ubiquitous language).
3. Allows complex systems to be broken down and made more understandable and manageable.
4. Improves system flexibility and sustainability.

Conclusion

These design patterns play a critical role in software architectures commonly used in the banking industry. Using the right pattern in the right scenario greatly improves the flexibility, maintainability, and reusability of the software. If you develop software in the banking industry, you can make your code more effective and robust by integrating these patterns into your projects.

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Resources:

1. Redis, Domain Driven Design (DDD)
2. Medium, Don’t use if-else blocks anymore! Use Strategy and Factory Pattern Together

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