The balancing act between agility & data protection for Financial Services Organizations

The financial services industry has always been data-oriented – whether that’s in the form of personal customer detail, to sensitive bank transactions and global trading information. Yet against this pursuit of delivering greater business value, the industry has to comply with ever-changing regulatory requirements that places greater emphasis on what the industry can and cannot do with collected data.

This balancing act is further complicated with the threat of new entrants to the market, and while some financial services (FS) organizations have taken incremental steps to ensure the value of the data is of use to the business, and is protected in a secure environment, they are faced with numerous challenges:

The struggle to innovate - One of the biggest inhibitors to innovation is the organizational structure within FS organizations. IT teams often struggle to manage the different requests, with their technology infrastructure becoming increasingly complex. New technologies which allow for automation, like automating home loan applications or removing the need to upload signed documents, are changing infrastructure and enables IT teams to support requests from the business. FS organizations have historically been holding back from adopting such technologies as it seems as though it shifts ownership, roles and takes away some of the processes which have been held dear for a long time in an industry steeped in tradition.

• Operational silos – Often as a result of different parts of the business running separate operating models, it can cause hugely convoluted issues for the IT team looking to make better use of the systems and processes in place. For example, most are running one for cloud and one for legacy systems. Employees don’t want to spend time doing laborious tasks in an outdated business application, if they can use an external cloud application to help them speed up the process. However, what IT teams don’t realize is that they are already operating in a hybrid environment if their enterprise is using public cloud services with or without their knowledge - and this poses further regulation risks. IT departments should be in the middle of this process and take back control of these highly-regulated environments.
• Understanding of new technologies - Banks were technology companies once – and then decided not to be, following a more general outsourcing trend. We are now going back through that cycle and turning into technology companies once again. However, FS organizations are just investing lots of money in tech, rather than really becoming tech firms themselves. While business applications are being developed to help employees do a job faster than ever before, they still need the agile and scalable infrastructure sitting behind them. In order for FS organizations to make most out of their investment in new technologies, and therefore, bring the most value to the business to enable them to innovate, businesses must invest in both scalable applications and scalable infrastructure.
• With this, comes the limitations of architectures - Many banks are still not using external cloud services for anything – which limits their scaling capabilities. Yet, change in the industry is happening incredibly fast – and there are continuous updates being made to regulation that FS organizations must comply with, for example, knowing what data they have and where it resides at all times. If you don’t update your architecture to keep up with new applications and the amount of data your organization has, in a secure way, it’s likely you’ll be a thing of the past. It’s hard to make predictions and decisions for the next 12 months when technology – and the wider industry - is changing so rapidly. This is exactly why you need to be able to swap infrastructure layers out and have an agile environment where the right changes can be made, depending on demand. FS organizations need to work out what technologies are best suited to them to make them as efficient and innovative as possible – and that enable them to use data in the most advantageous way.

With all of these challenges, how can FS organisations protect their data, but be agile enough to keep up with the changing market conditions? Automated architecture, like Elastic Cloud Storage (ECS), is just one way to help businesses to:

1. Plan for growth – FS organizations – like other businesses - need to be able to plan for growth. However, trying to determine the growth curve is extremely difficult. ECS provides cost benefits as it goes up and down with the data demand, with organizations making up to 60% Total Cost of Ownership (TCO) savings. By being able to keep up with demand, ECS can help enable greater competitive advantage.
2. Create an agile & controlled cloud environment - Businesses can grow and innovate by using different cloud models that are suited to their organization. In order to innovate, businesses should focus on the application development team’s needs for faster app development. Developers need cloud access so they can build, test and develop there. It also means that instead of data sitting in siloes, it can be accessed and managed in a single cloud environment. To embrace digital transformation, having access to one object storage platform for all data can help FS organizations optimize new and existing IT investments.
3. Enable more security in a highly-regulated environment - When implementing a new cloud architecture, you come under more scrutiny. More and more parties have come to the table – from legal to compliance to information security and so forth. However, the fact that these cloud services are under so much scrutiny means that it is one of the most secure environments. Typically, they are run in the supplier’s datacentre (HR, ServiceNow, Webex) – however, when you examine them, they’re very often run out of public clouds. This means that you don’t know what their cloud environment is like and where/how your data are stored. By using ECS, you know where your data is hosted at all times, for a more secure environment.

Having the right infrastructure allows regulators to have a clear picture across the whole of an organization and allows banks to choose where they want their systems to run. By having data reside in a single and controlled environment, FS organizations can create a more collaborative culture where IT sits in the middle of the business. In addition, it allows them to make more cost efficiencies, and innovate quicker, by being able to scale up and down as and when the business demands it. By looking to the future and getting ready for all the possibilities that new, automated technology can offer, organizations will be one step ahead of competition and be able to make the most out of all the data they hold – whether that be new or old.

I’d be keen to hear your thoughts in the comments box below on any other challenges you are facing with your storage and infrastructure environments – specifically in the FS industry.

Regards - Antonio