Gartner predicts that within 12 years time, 80% of financial firms will either go out of business or be rendered irrelevant by new competition, changing customer behavior, and advancements in technology.
In retrospect, the financial industry has hemmed and hawed over cloud adoption. Strict regulations, privacy, security and several other factors contributed to this. Lack of secured access to internet standardized Cloud as a risky affair. Customer satisfaction, costs, and limitations of legacy infrastructures added to this belief. Today, the Internet and Cloud are the new norms of the Digital world. And that’s no different in the case of the Financial Services industry. Emerging new business models are already gaining from digital capabilities, multi-cloud and the ongoing FinTech onrush. In established financial institutions- banks, capital markets, and insurance- IT leaders are increasingly recognizing that cloud is the way to unlock the future.
We live in the same World – Cloud
According to a recent report, 60% of financial services enterprises expect to transform their IT environments to multi-cloud, leveraging both on-premises and externally hosted cloud infrastructure. Further, the report highlights that by 2020, emerging new business models could potentially impact up to 80% of current bank revenues. The fact is no less than an alarm bell for already established FS enterprises – The time is now to transform.
In 2018, India ranked second globally with 57.9% FinTech users. Public cloud adoption rocketed sky-high. Further, according to reports the finance cloud market size is estimated to grow to USD 29.47 billion by 2021, at an estimated Compound Annual Growth Rate (CAGR) of 24.4%. Although there’s more scope for cloud and other FinTech to grow, it seems, with hindsight 20/20, IT leaders in the financial sector have well realized the benefits of cloud architecture.
Finance IT leaders leveraging multi-cloud architecture say, they’re benefiting an improved application performance (62%), meeting regulatory needs (43%) and cost optimization (40%). Financial services businesses demonstrate higher cloud adoption rates when contrasted to the overall survey sample, for public cloud IaaS (51%, compared to 46%), on-premises private cloud (49 to 37%) and platform as a service (39 to 31%).
Transforming with Cloud
Like in any other industry, IT in Financial Services is under a massive threshold of transformation. Trade, banking, and investment is a matter of either a click or a tap. IT is fast becoming software-centric and digitalized. Old and new financial firms are taking a diverse range of digital initiatives to create new offers, improve existing services, and make complicated processes simple and efficient. Consider one of India’s largest financial services enterprise – Motilal Oswal. A veteran in the Indian Financial Services landscape and worldwide, the company is setting up a perfect example of how behemoths with distributed enterprise architecture can enable cloud transforming to digital.
In 2019, the company announced that it was migrating to the cloud to redesign IT infrastructure. But it’s not here when the company started preparing and planning for their journey to Digital. It’s back in 2018, the IT leadership with its futuristic vision first transformed its legacy network architecture with next-gen software-defined network architecture – ScaleAOn SD-WAN. Earlier the company’s network (MPLS being the primary connectivity) acted as a bottleneck to digital transformation. MPLS lacked agility and the flexibility to support its futuristic cloud vision. MPLS resulted in low performance, latency and packet loss. On the cost end, higher bandwidth costs increased CAPEX and OPEX. Hence secured direct access to the Internet became the need of the hour. Keeping better connectivity, improved network up-time, and digital transformation top of the mind, the company decided to transform its network first.
Today, from integrating voice technology, data science and RPA (Robotic Process automation) to automating processes, Motilal Oswal has been doing everything right, to stay up ahead in the digital curve. The company also announced few futuristic digital initiatives which include an AI-based system that will allow end customers to interact with stock market machines. Then a WhatsApp based transaction platform for its investors – first of its kind initiative in the Indian Financial Services Industry.
Financial Services Industry 2020
Banking, Trading, Investments, and Insurance are nowadays, just a matter of a Click or Tap. Thanks to Cloud and the Internet. But what turned a risky affair – Cloud, and Internet – into a love affair? It was nothing but Software Defined Networks. SD-WAN offered secured access to the Cloud using direct internet access. And today Cloud holds the key to fulfill the rapidly changing business demands.
89% believe that it is inevitable that banks rapidly modernize processes and IT to avoid losing market share.
Today, the need of the hour for traditional as well as non-traditional financial institutions (born in digital) is Cloud – Which begins with network transformation. To enable your cloud journey, understanding network transformation solutions that can optimize and simplify network operations is crucial. PWC’s latest report, mentions the top six priorities, IT leaders in finance should focus in 2020. Here’s a gest,
- Prepare an IT operating model which adapt and meet constantly evolving customer demands.
- Reduce costs using cloud and by simplifying legacy systems.
- Artificial Intelligence and Robotics Adoption
- Build an intelligent IT stack capable of addressing customers needs
- Adopting next gen Infrastructure to connect to anything and anywhere.
- Pay more attention to Cyber Security
By now IT leaders in the financial industry, have well understood that digital transformation is an ongoing process. How well you strategize the future will depend upon how you leverage technology – FinTech, Insure-Tech, Wealth-Tech – today. If you’re thinking to address change in your enterprise’s network architecture, let us help you in assessing the right network requirements. Click here to connect with us today.