The Future of Financial Services Is in the Cloud
Competition to provide better, faster and secure digital services drives many financial service companies to modernize their IT
By Ken Kaplan
There’s a race to bring financial services to more people around the world.
To stay competitive with born-in-the-cloud FinTech startups – and better meet growing global demand for more efficient, customer-centric services – financial companies are embracing the cloud. Many firms are using a hybrid mix of public and private cloud environments for everything from back-office functions to core processes such as payments and credit risk management.
Financial companies that fail to innovate by doing things like using the cloud are doomed, says Alexandre Delen, executive director of Delen Private Bank, a leading European wealth manager that has taken digital disruption to heart.
“It’s not enough to offer customers a menu of digital services they can access online,” Delen says. “The leaders will be the financial organizations that can harness the power of digital technology to offer their customers unparalleled experiences.”
Finance Companies Rise to the Cloud
Financial companies increasingly realize the need for technological transformation. Financial services companies are expected to spend $500 billion globally on information technology by 2021, up from $440 billion in 2018, according to Statista.
A significant portion of that will be funneled into hybrid cloud adoption, according to Kevin Lash, Director of Global Financial Services Strategy and Solutions for Nutanix, a leading cloud computing company. According to a survey of 2,650 global IT decision makers, nearly 18% of financial companies already are running hybrid clouds.
“Almost every financial institution is introducing new digital products and services into the market to compete,” Lash says.
How Companies are ‘Breaking New Ground’
Financial services companies struggle with digital transformation because they must comply with government regulations, security and reliability requirements. But those constraints haven’t stopped many from turning to cloud services, artificial intelligence, machine learning and automation technologies to run and improve their business. “Those are the companies breaking new ground,” Lash says.
Many companies are modernizing their data centers with hyper-converged infrastructure (HCI) to streamline operations and have their own private cloud infrastructure, which opens the door to hybrid cloud. With access to a range of cloud capabilities, companies can quickly test and roll out new services, and be more responsive to changing business needs, all while controlling risk.
An HCI management control plane enables financial companies to easily and seamlessly work across the public and private cloud platforms. It also helps them spot and stop runaway spending, and automatically identify security and compliance gaps on public cloud services.
For Johannesburg Stock Exchange, the largest stock exchange in Africa, moving to HCI reduced the time-to-deploy and the need for intervention to fix IT problems by 70%. “We are expecting an overall cost reduction of approximately 45% over the next five years,” says Robin Tucker, the Head of Enterprise IT at JSE.
The Case for the Cloud is Made
Financial services companies that have shifted to hybrid cloud are showing the industry why modernizing IT is essential in the race to remain competitive – and meet consumer needs.
“Through the private cloud and its capacity to create development environments, we can address the needs of our organization more rapidly and consequently address our clients’ needs more rapidly,” said Thierry Pinart, Chief Technology Officer for Global Infrastructure Group, Société Générale, in the ebook, Here for Change: Architecting the Financial Services Digital Enterprise.
To learn more on the state of global enterprise cloud deployments and adoption plans based on input from over 2000 leaders, download the 2019 Enterprise Cloud Index report.
