IT in financial services: Elevation through software-defined disruption
CIOs of major banks and financial institutions are today facing a task equivalent to the feeding of the five thousand. While IT systems in the past have always grown, it was comparable to making one casserole for four people stretch to six when two uninvited guests showed up for dinner. Now hundreds of people are coming for food, all day, every day, and they all want different meals, at different times of the day.
This barrage of meal requests is like the complex needs of the staff and customers of a modern-day bank or building society – the challenge is leveraging the power of Big Software. How to learn about it, manage it and deploy it for a variety of use-cases.
Scalability is critical and costs must be kept down, so choosing between public clouds or building your own, all while keeping data secure and systems (including legacy or home-grown ones) interoperable, is the ultimate goal.
Open source has long been a part of these complex IT infrastructures, but with customer data security of the utmost importance (and so heavily regulated) how can financial service providers take advantage of the latest software engineering expertise, protect customers and still maintain a cost-effective operation?
While there is no one-size-fits-all answer to this question, what has become clear is that IT departments need to be the ones leading these strategic conversations.
Banking on software
It’s no secret that, amidst changing regulations, mounting customer expectations and increasing competition from a plethora of fintech start-ups, the banking sector is experiencing some serious disruption.
Financial services has quickly become a software-driven industry. Customers are demanding innovation and want to be able to interact with their chosen bank at a time that suits them, across a combination of both online and offline channels.
This means banks have to be prepared to change how they operate and embrace the era of Big Software through the likes of Software-as-a-Service (SaaS), big data, cloud, containers and microservices. If they don’t, they will likely be overtaken by faster and more innovative competitors.
The introduction of Open Banking has also played a key role in this shift. Open Banking refers to the use of open APIs (Application Programming Interface) that enable third-party developers to access UK banks’ customer data and build applications and services on top.
It is heavily dependent on the use of open source software and, with 99% of payment executives saying their bank plans to make major investments in Open Banking by 2020, will likely be an integral part of the future of financial services.
The challenge is that although these technologies present several opportunities, they also bring complexity. Where applications used to be relatively contained and simple to manage, they now have to be rolled out across hundreds or thousands of on-premise and hosted physical and virtual machines.
Not only does all this have to be accomplished as cost-efficiently as possible, with the right mix of products, services and tools to match the requirements of the business, customer data also has to be kept secure.
To address these issues, organisations have to realise the importance of the IT department in enabling innovation while also ensuring security and business continuity.
Raising the bar for IT
The position of IT across all industries, not just financial services, has been significantly elevated as the Big Software revolution has continued to take hold.
Indeed, many IT departments now enjoy strategic recognition, rather than simply being consigned to supportive, back-office functions. For example, in a recent Brocade survey 97% of respondents recognised the IT department as important to enabling their organisation to innovate and grow, highlighting how IT teams’ knowledge is now frequently tapped into when it comes to shaping strategic direction.
However, there are still challenges that need to be overcome, with nine in ten (91%) IT Decision-Makers (ITDMs) saying there are issues preventing their IT department from delivering on business demands. For example, IT departments often spend large proportions of their time maintaining data security (73%) and legacy systems (63%) which will restrict the time they have available to innovate and digitally transform their organisations.
For those banks that haven’t yet realised the value of IT, now is certainly the time to do so. Technology has already transformed business processes in financial services and, with the growth of Big Software and Open Banking, having access to a robust IT infrastructure that leverages the capabilities of these technologies is only going to increase in importance.
As such, the emphasis for IT teams is now geared more towards building platforms that enable banks to innovate and solve specific business problems, rather than simply keeping the lights on.
With their ability to understand the business value of technology, IT departments can bring a huge amount of value to strategic boardroom discussions. Given the widespread disruption opportunities available to fintech startups, this expertise could prove invaluable.
It’s no secret that technology has significantly changed the way banks and financial institutions work and will continue to do so over the coming years as the momentum behind Big Software grows.
IT teams, therefore, are perfectly positioned to understand these latest digital trends and in turn use cutting-edge innovations to solve their organisation’s specific needs.
Jason Bobb, Senior Vice President of Global Sales and Business Development, Canonical
Ireland is key launchpad for US expansion into Europe
The first transatlantic cable was laid between Newfoundland and Valentia Island in County Kerry, Ireland, in 1858. It was a flawed effort; the connection was poor, causing enough issues with efforts to send telegrams along it that major repair efforts were set underway immediately - efforts which ended up further damaging the cable line, severing the connection just three weeks later.
This first step towards transatlantic subsea communication, shaky as it was, laid the foundations of more than a century and a half of information exchange across the ocean, between the East Coast of North America and Western Ireland.
It’s been 163 years since the completion of the first transatlantic cable, an event which cemented Ireland’s position as the landing stage for subsea connections between Europe and the Americas. That position has, in no small way, been a driving force behind the country’s modern role as a landing stage for US and Canadian firms looking to do business in Europe.
Today, some of the largest firms in the world, like Pfizer, Janssen, Zurich, Metlife, Google and VmWare use Ireland for their European Headquarters. The combination of an English-speaking workforce (a boon made all the more important as Brexit makes the UK and the north of Ireland an increasingly complex environment that provides diminishing opportunities to access the rest of Europe), a cultural and regulatory landscape that welcomes foreign investment, and world-class connectivity makes the country an unparalleled choice for firms looking to establish a foothold in the EU.
As a result, Ireland has become one of the world’s leading data centre hubs.
Based on leading data centre firm Interxion’s Data Gravity Index, Dublin will be among the top five European cities that will contribute to Europe’s growth in data in the coming years, following London, Paris, Frankfurt and Amsterdam. The amount of data generated in Dublin itself is expected to grow alongside its economic expansion, with the Data Gravity Index also predicting that Dublin will outpace cities and data centre hubs like Mexico City, São Paulo, and even Shanghai, to be among the top 20 cities to experience annual data growth by 2024.
Ireland ranks 6th in the 2020 EU Digital Economy and Society Index (DESI), meaning that it is among the leading ranks of EU Member States in terms of the uptake and use of digital technologies. Likewise, the trend to locate data centres in Ireland serving overseas clients will continue to generate increasing amounts of international traffic
Managing the Dublin Data Boom
According to Interxion, subsea connectivity will continue to play a massive role in helping both international and domestic organisations digitally transform themselves to meet the challenges of changing markets post pandemic.
As the pace of global digital transformation - and the subsequent need for more connectivity - accelerates like never before, this rapidly developing world is driving urther demand for these cables as individuals and organisations become increasingly reliant on subsea cable’s exceptional data speed and capacity.
According to experts at Interxion, this connectivity will be pivotal to Ireland’s continued success in attracting international companies in the technology, pharmaceutical and financial sectors.
The subsea cable industry is a key contributor to the Irish economy across many sectors. The draft National Marine Planning Framework reported that subsea international networks make Ireland an attractive region for investment for the technology and digital sectors. Telegeography states that there are twelve existing subsea cables connecting Ireland to the US and UK, and a further four systems are under development. The Iish government’s statement on the Role of Data Centres in Ireland’s Enterprise Strategy identified Ireland as a location of choice for many different sectors reliant on digital and telecommunications capabilities, all of which in turn rely on subsea cable interconnectivity.
Subsea cables are of strategic importance to Ireland’s future as a catalyst for economic and societal prosperity. Ireland can be the ideal location for your company’s expansion plans. To find out how, you can hear from leading experts throughout the data centre and digital infrastructure industries on June 15, 2021, as speakers from the IDA, Aqua Comms, GTT Communications, euNetworks and Interxion discuss subsea cabling, digital transformation, Data Gravity and the fate of Ireland’s digital economy.
Key topics will include:
- Key facts about existing subsea infrastructure,
- Future plans,
- Challenges (including Marine Maintenance) and opportunities,
- Terrestrial networks (demand vs supply);
- Ireland's role as a gateway to Europe
The virtual panel (which is taking place between 10:30 PM - 11:30 PM JST on June 15, 2021) will conclude with a 20 minute Q&A. Mike Hollands, Senior Director of Market Development at Interxion, will moderate the event.