Table of Contents
Introduction
When it comes to developing software for the finance and banking industry, C++ is often the language of choice due to its performance, efficiency, and flexibility.
However, writing C++ programs in this highly regulated and fast-paced environment comes with its own set of challenges. From managing the complexity of legacy codebases to ensuring real-time performance for trading systems, developers face numerous hurdles. Regulations and stringent security measures, compliance with industry regulations, and the ever-present demand for high reliability and accuracy also compound this problem.
In this blog, we will explore some of the biggest challenges C++ developers encounter when creating software solutions for the finance and banking sector.
Why use C++ in Financial Software
Banks and financial institutions are always looking to improve their trading infrastructure and upgrade their data-management capabilities. Having the best financial model mathematical models help generate profits and reduce risk in a highly volatile and time-sensitive market.
And it just so happens that C++, a low-level language, is the top choice due to its speed and efficiency, making it a preferred choice for high-frequency trading platforms, risk management systems, and other critical financial applications.
The challenges to becoming a programmer in the financial industry
When you’re a developer in the financial industry, it’s almost always a given that apart from being able to program, you would also be able to understand the math to validate various financial models. Some developers may also conduct research and hypothesize on new trading strategies themselves.
Becoming a quantitative analyst, bank developer, or high-frequency trader can be very lucrative career choices. However, it also means that there are stricter requirements and skill sets to be qualified.
As an aspiring developer, here are the key problems and frustrations that C++ developers in the financial industry should keep in mind:
Training requirements and developer skill set
- Steep learning curve
You can be a decent trader and a researcher using basic programming and scripting languages such as Python. But on the other hand, knowing C++ from just a broad level won’t be able to help you as much since you won’t be able to utilize the low latency advantages. If you really want to implement models and develop applications for the industry, there is a certain level of optimization skills you need first. - Understand modeling and simulations. It comes as no surprise, but there is a hefty amount of math involved in the financial industry. Financial algorithms can be mathematically intensive, requiring developers to have a strong understanding of quantitative finance and numerical methods.
- Need to invest in skills other than programming? Developers often need to implement complex models that simulate market conditions or risk factors, which requires a deep understanding of both finance and C++. However, this is less of a problem if you’re working with a diversified team of developers, traders, and analysts.
Programming requirements: Performance Optimization
- Low Latency Requirements
Financial applications, especially in trading, require extremely low latency. Developers must continuously optimize their code to reduce execution time to microseconds or even nanoseconds. - Resource Management
Efficient memory management is crucial—each unoptimized bit of code can amount to micro delays that can be the difference between a winning and a losing trade. C++ developers need to carefully manage resources, avoid memory leaks, and ensure optimal memory performance in their code. - Accuracy and code correctness: Financial applications often rely on parallel processing to handle large volumes of data. The source code and the project itself may not be massive, but the intricacies involved must be accurate because of the sensitive nature of market prices. Still, managing developer mistakes and errors in C++ can be challenging and error-prone.
Programming requirements: Performance Optimization
- Low Latency Requirements
Financial applications, especially in trading, require extremely low latency. Developers must continuously optimize their code to reduce execution time to microseconds or even nanoseconds. - Resource Management
Efficient memory management is crucial—each unoptimized bit of code can amount to micro delays that can be the difference between a winning and a losing trade. C++ developers need to carefully manage resources, avoid memory leaks, and ensure optimal memory performance in their code. - Accuracy and code correctness: Financial applications often rely on parallel processing to handle large volumes of data. The source code and the project itself may not be massive, but the intricacies involved must be accurate because of the sensitive nature of market prices. Still, managing developer mistakes and errors in C++ can be challenging and error-prone.
Programming requirements: Compliance and Regulations
- Compliance with regulations
Apart from being mathematically complex enough as it is, financial software must comply with stringent regulations within the company and the government. Developers need to ensure that every bit of their code adheres to compliance requirements—this can vary by region and change frequently. - Auditability
The code must be auditable, meaning that it should be easy to trace and understand how financial decisions are made by the software, which adds another layer of complexity. - Vulnerability Management
There are many available libraries and third party extensions for C++ developers. Developers, however, need to stay on top of potential vulnerabilities in C++ libraries or the codebase itself to prevent exploits.
Tips for facing these challenges
- Study the math, polish your C++
As mentioned earlier, you can be a pure developer and just implement whatever algorithms that are supplied to you. But to become a better analyst and interpret trends yourself, you need to equip yourself with more than programming skills.If you’re looking to familiarize yourself with the concepts, there are many great resources available such as Investopedia. For specific use cases or general C++ skills, a good old reference book (such as those from Scott Meyers or one from Bjarne Stroustrup himself) will always be great options.For references regarding high performance C++, there are also great resources online such as:- Algorithmica’s Algorithms for Modern Hardware e-book by Sergey Slotin et al
- Performance-aware Programming series by Casey Muratori
- Optimising C++ by Agner Fogg: probably the classic C++ optimisation bookThere are two published books with relevant titles which we have not read or evaluated. They are Developing High-Frequency Trading Systems and C++ High Performance. Both are published by Packt, and again we note we have not read these books.
- Invest in understanding above and beyond your tasks
Banks and financial institutions, especially top ones, will only hire the cream-of-the-crop devs. Average devs with pedestrian level finance knowledge will be less appealing for the simple fact that for an expensive role, financial firms expect the maximum returns.
This often means that being a financial developer entails learning and understanding current market trends, calculating opportunity costs, and economic theories yourself—not just the technical aspects of implementing them into an algorithm.
- Get all the help you can
Take note of tidbits of knowledge you’ll pick up on the spot from existing codebases accessible to you. Colleagues may also come to you directly and give you advice on how best to tackle certain financial puzzles.
As for developer tools, they are oftentimes underestimated in terms of how helpful technology can be when you’re developing software and finance algorithms. Having a conducive and smart development environment can be the small difference between a timely implementation hauling your company massive profits, or an unfortunate missed opportunity.
Try to invest in software that allows you to focus and concentrate on the core work such as thinking and planning. For example, there are many productivity tools available online that seek to help developers monitor their code’s quality. There are also tools that help in maintaining or refactoring code bases. These are all tools that can help you stay on the cutting edge.
Protip for those coding in Visual Studio C++
Visual Studio remains the premier IDE for C++, especially serious C++ programming such as financial services. That includes deploying to Linux. Visual Studio is a robust IDE for developing C++ financial programs because it offers powerful debugging and code analysis tools, which are crucial for maintaining high-quality, error-free code in critical financial applications, plus strong performance and profiling tools.
It provides extensive support for modern C++ standards and libraries, ensuring compatibility and performance optimization. The IDE integrates well with various version control systems, enabling smooth collaboration and code management among development teams. Additionally, Visual Studio’s extensive ecosystem of extensions and plugins allows developers to customize their environment to fit specific financial industry requirements.
There are general plugins that augment the entire IDE with faster processes and more intuitive workflows. For example, Visual Assist, one of the most popular VS extensions, provides faster ways to navigate projects, convenient one-click solutions to maintaining code, and additional syntax support not available in the default VS IDE. Here are some specific features:
- Code Inspections
- Code Refactoring
- Open File in Solution
- Find Symbol in Solution
- List and Find References
- Special C support
When writing high performance C++ you’ll find yourself doing things like (for example) avoiding memory allocation, and Visual Assist’s set of refactorings can assist with all sorts of work that can move code around to assist your improvements. A trivial example is converting a heap-allocation to a stack allocation via the Convert Pointer to Instance refactoring.
You can’t underestimate how helpful it is especially in a high-stress and time-sensitive profession.
Those jobs are high stress and lots of crunch is expected. Our navigation features get you around much faster than the built in tools Open File in Solution, Find Symbol in Solution and Find References just works that much better and faster.
Conclusion
Becoming a programmer in the financial industry is no small task. There are many significant challenges presented to you both as a programmer and as a learner. It is a constantly evolving profession—like a perpetual hackathon. You have to stay on top tech and industry trends to ensure your company is getting the best results it can.
Study beyond your delegation. Utilize all the tools at your disposal. And most importantly, persevere.
