Driven by technological advancements, financial services firms have improved internal and external systems and processes, redefining the industry with digitization, personalization, and risk management. It’s also unsurprising that cloud computing and data are a big part of this evolution.
In Australia and New Zealand (A/NZ), cloud adoption has grown exponentially and now represents a significant portion of the IT software market. At the end of 2021, expert analysts from the International Data Corporation (IDC) found cloud revenues within A/NZ grew by 31%, representing 45% of the total software market.
Meanwhile, GlobalData expects the cloud computing market in APAC to reach $191.8 billion by 2024, growing at a CAGR of 7.7% between 2019 and 2024.
Pandemic-induced disruptions, evolving consumer behavior, and extreme competition have also attributed hybrid and multi-cloud environments as the new computing norm. At this point, 80% of organizations worldwide have already adopted a hybrid cloud strategy and 89% a multi-cloud strategy, according to Flexera’s 2022 State of the Cloud Report.
These cloud-based architectures are also highly manageable, easily scalable, and cost-effective, allowing financial services firms to pick and choose individual cloud offerings to meet specialized needs. The ease with which stakeholders can share and access data with a hybrid cloud fuels a data-driven culture and helps companies accelerate the time to insight. It also helps drive growth while providing security and data control, improving customer focus, improving regulatory compliance and security risks, and reducing unnecessary complexity. This is crucial when dealing with investments, funds, and sensitive customer information.
The undeniable advantage of an enterprise data strategy
More than ever, data plays a vital role in modern financial markets and industries. When we talk to our customers, one of the most common issues is the struggle to manage and analyze the massive amounts of data they continue to collect. With multiple systems and platforms feeding data throughout the organization and around the clock, good data governance and management are paramount to avoid reputational and financial damage.
According to Cloudera’s Enterprise Data Cloud Maturity (EDC) Report, improving customer experience and satisfaction is an area where data and analytics are used in the financial sector in APAC, with 77% of senior decision-makers (SDMs) and 58% of seniors. IT decision-makers (ITDMs) say their organization is doing this.
Overall, the report found that 83% of SDMs and 81% of ITDMs also state that their organization has a business data strategy, and 96% of SDMs agree that optimizing data management within organizations is important. Regarding economic fallout, SDMs report annual losses of $125,882 due to missed opportunities related to data.
A robust data strategy will go a long way in ensuring businesses reap the benefits of hybrid and multi-cloud solutions, such as improving the customer experience and meeting data challenges.
Hybrid and multi-cloud innovation halted by silos and security vulnerabilities.
With financial services firms rapidly moving to the cloud, those unaware of closed-source ecosystems’ data integration challenges and drawbacks often find their organization’s data siled. These silos hinder hybrid data cloud and multi-cloud innovation and prevent stakeholders from extracting meaningful business insights from data.
Silos and closed-source technologies also make data management and security in hybrid cloud and multi-cloud environments a challenge of increasing concern to the financial sector. Integrating technologies with proprietary data catalogs and security policies can be tedious, difficult, and time-consuming, wasting significant resources and creating risk simultaneously.
Silos and proprietary security also limit companies’ visibility of their data line, preventing companies from establishing proper audit trails and managing risk, making compliance a challenge, and inviting cybersecurity threats.
Many companies new to the multi- and hybrid cloud often rush through setting up environments without a sound enterprise data management strategy that is organization-wide, integrated, controlled, and secure. We work with companies in some of the most regulated industries in the world, including financial services, and the highest levels of security governance and metadata management must be provided.
Cost issues lurk in the shadows of digital transformation.
While hybrid and multi-cloud architectures have the potential to significantly reduce costs as companies move into new phases of digital transformation, when mismanaged, they can also add enormously to overhead expenses. Silos and a lack of data management and visibility can lead to cloud sprawl, which describes when companies lose track of where applications are hosted or are not running efficiently.
Some cloud services are priced based on compute resource consumption, and others may charge based on scanned data per query or bandwidth. Companies unfamiliar with the disparate pricing, reimbursement, and infrastructure models used by different vendors often incur high costs as they struggle to halt sprawl.
Enterprise data strategies eliminate silos and build a data governance
Our EDC report found that 91% of SDMs believe it would be valuable to understand data across hybrid, multi-cloud, and on-premises architectures. Nearly all (91%) ITDMs agree that organizations implementing hybrid architecture in their data strategy will gain a competitive advantage.
To break free from silos and rise above competitors, companies must ensure that their enterprise data strategy and architecture enable fast, free data flow between all environments. This can be done by choosing a best-of-breed suite of compatible technologies and integrating them into a management platform that aligns with business objectives.
Open-source technologies such as Kubernetes and Apache Spark provide excellent compatibility, interoperability, and control, enabling businesses to simultaneously store, manage, and secure data across multiple cloud vendors. They also would allow enterprises to avoid vendor lock-in and exploit open-source ecosystem partnerships and rapid community innovation.
The report found that 94% of SDMs and 86% of ITDMs say secure, centralized governance and compliance across the entire data lifecycle is valuable when processing and managing data. To ensure sound data management, companies’ business data strategy must use a unified security model to enforce consistent security and data management policies across all on-premises and cloud environments.
While open-source technologies help companies gain better control over what workloads are running and what data can be accessed, a unified security model allows organizations apto ply granular security policies with a complete data lineage and audit trail that are critical to ensuring data integrity. and compliance. doesn’t matter where the data is.
As the highly-regulated financial services industry pursues ambitious growth through the cloud, organizations will be increasingly scrutinized and required to comply with higher security and governance standards. Likewise, banks and financial institutions are also under increasing pressure to provide modernized and flexible customer and employee experiences.
Before starting, financial services firms must conduct a comprehensive data strategy review with all stakeholders to ensure the enterprise has all the foundations for today’s fast-paced environment. This includes a full assessment of the scalability, availability, and key resource metrics of the multi- and hybrid cloud environment for running workloads – along with associated fees and vendor contracts.
By using a well-planned, well-executed business data strategy to drive a company’s cloud strategy, enterprises can use the cloud to drive business success. By using a well-planned, well-executed business data strategy to drive a company’s cloud strategy, enterprises can use the cloud to drive business success. A hybrid data cloud strategy should help optimize cloud workloads and be cost-flexible enough to encourage innovation. This keeps the organization now agile and adaptable to changing future needs.
