The financial service industry’s (FSI) recent acceleration to the cloud has outpaced any other industry, facing both new challenges and opportunities.
The challenges facing the FSI industry today include heavy regulation and significant internal compliance. Any solution deployed must ensure these requirements are met, while still providing all the value of moving to the Cloud – from greater agility and accelerated modernisation to the increased ability to innovate.
When harnessed effectively, these opportunities have considerable business potential and FSI has indeed been one of the leading adopters of cloud and new digital technologies following the surge in cloud adoption in the UK. But this has also meant the industry’s become a target for cybersecurity threats due to the sensitive nature of its data.
It is critical that the industry analyse the challenges of modernising operations for the financial services industry, as well as the opportunities available for organisations to ensure a successful outcome.
So, where are we at?
In early 2020, an unprecedented increase in data generation, utilisation, and management challenges were experienced across the globe. Work from home mandates and other public restrictions drove the need to digitalise business operations – from customer and employee interactions, through to product delivery and service fulfilment.
In particular, the UK experienced a leap in data usage, leading to higher-than-average cloud adoption. As highlighted in Frost & Sullivan’s ‘Modernising Operations and Customer Interactions in the UK Financial Services Industry’ report, the adoption of cloud infrastructure was higher in any other major region – with 55% of organisations deploying public cloud / hosted private cloud and 45% deploying organisation-managed infrastructure.
For banks and financial service industry companies, migration to the cloud took place at record rates. About half of all FSI organisations already use public or private cloud services, and this is only expected to increase, with 90% anticipated to use public or private cloud services by 2023.
What does this mean for FSI data?
Both the FSI and the tech sector responded with the highest increase of employees working from home. With this increase in remote workers came a simultaneous rise in incidents of cyberattacks.
In 2020, UK businesses saw a 40% increase in cybersecurity breaches. The advantages of data in the cloud means data is fully accessible, but leveraging these advantages must come with a focus on minimising risk.
Banks and financial institutions are a cornerstone of the national economy: their focus and efforts need to be on providing high-value services with the greatest security and availability. With this comes three reigning cloud challenges that the industry currently faces when it comes to innovation and keeping data secure.
Firstly, data compliance and security are critical for proper FSI cloud implementation. In the UK, 66% of businesses cite security as their major cloud-related concern. Paired with the fact that 89% of global IT executives in FSI reported an increase in cyberattacks in 2020, it’s clear that businesses need to look to integrated cloud compliance and cloud security solutions to automatically ensure data and apps are safe and compliant.
Another challenge facing the FSI in terms of keeping data secure is the critical need to ensure optimal data backup and recovery from the cloud. When looking for solutions and a cloud partner, this is the service that FSI businesses must keep front of mind. Leveraging backup services from advanced cloud service providers means the deployment of solutions that work across hyperscalers and workloads.
But it all comes down to management. A significant challenge for the sector is how organisations manage a multi-cloud environment. This has become critical to FSI organisations, as nearly half (49%) employ multi-cloud services. However, 34% say they have challenges moving to the cloud, and 67% have repatriated workloads back on-premises. Here, FSI businesses need to leverage the powerful data management capabilities currently on the market in order to efficiently build and manage a multi-cloud environment either on-prem, near-prem and in the cloud, without the risks of data silos.
How can FSI businesses remain competitive?
With support from partners, FSI organisations can understand the need for secure, compliant solutions, and thereby provide the right tools for data storage and management. This can help avert costly repatriation, security challenges, and help keep costs aligned with expectations.
To remain competitive as data and technology advance, FSI firms must shore up their operations regardless of data infrastructure and utilisation.
Yet, the work doesn’t stop there. In today’s digital environment, businesses must continue to question capabilities to ensure they stay competitive. They should be asking themselves, is the organisation prepared for the increasing onslaught of data generation and potential cybersecurity attacks that come with digitalisation? Can it be certain that all data, apps, and systems will always comply with evolving regulatory demands? Does the current data and security strategy scale easily for growth and expansion? To remain competitive and allow business focus to be on outcomes and innovation, financial organisations must work with cloud partners that provide the tools to keep these roadblocks at bay, and support operations now and in the future.
