When it comes to digital transformation, few industries are moving as quickly as the financial services.
The need to adopt the latest innovations and shed inefficiencies has become hardwired into the make-up of the industry, and for obvious reasons.
Just shaving a few milliseconds from certain processes can give an organisation a significant advantage over its competitors in an industry where time really is money.
This explains why the industry has one of the highest cloud adoption rates around, with 68% of organisations having partially or completely adopted the cloud.
That’s higher than either the retail or manufacturing industries.
Add to this the threat of new entrants like Monzo and Revolut disrupting the industry and it’s created the perfect storm when it comes to change.
Retiring the physical
Virtualisation is when you take an important piece of hardware or software and create a virtual version of it that exists in the cloud.
And practically every benefit of virtualisation is relevant to the financial services industry.
Using this technology financial services companies can be more investigational with new software, especially ones that helped them process customer data more securely and efficiently, as well as open the door to collaboration with fintech start-ups.
All this while significantly cutting their costs.
And due to the flexibility of cloud services, organisations can easily scale up depending on the market atmosphere or customer demand.
Today, 84% of them have adopted a cloud-based system for analytics and control.
And while cloud has helped the financial services industry virtualise a lot of its functions, it doesn’t cover everything…
Layering the new on the old
Underpinning almost every action a financial services company takes is connectivity.
Whether it’s with customers or markets, no firm can exist in a bubble.
However, despite numerous innovations many firms are still reliant on legacy networking systems.
This can be a serious hinderance to innovation, yet 84% of financial institutions said they struggle with upgrading legacy IT infrastructure.
Old networking software is often incompatible with intelligent systems. And with 5G around the corner, these legacy networks are growing increasingly obsolete.
Legacy networking infrastructure is also poor at coping with sudden changes in demand. A staggering 92% of financial services organisations have already invested in tech to help it cope with spikes in traffic.
And if you can’t leverage the latest innovations, it’s going to be hard to attract the best talent or keep up with customer expectations.
For many, legacy networking infrastructure is the last piece of the old world holding them back from achieving a truly intelligent workplace.
When you combine software-defined networking (SDN) with virtualisation, we see the next stage of evolution for networks.
Traditional network infrastructure is managed by integrated software which is built into routers and switches. So, these devices both move and manage data in the network.
SDN allows us to separates these two functions.
While the networking hardware is still responsible for the conveyance of data, software manages it.
It gives you a virtualised, holistic view of your entire network, allowing you to react faster to incidents.
So when there’s a security breach, it can be pinpointed and firewalled rapidly. You can also update security rules at a speed we haven’t seen before.
And when there are spikes in traffic, a virtualised network environment makes it easier to allocate bandwidth where it’s needed, because you can analyse your entire network on a granular level.
To put it simply, all of these features make your digital transformation journey a lot less bumpy.
Agility has become a definer of an organisations ability to navigate the modern business climate.
Almost every financial institution (92%) finds it challenging to actually use the data they collect to meet and inform their business objectives.
So, at its most practical, the ability to virtualise your network gives you a significant competitive advantage.
Because if there’s something any firm can always use more of, it’s better data analysis and increased agility.