How regulated industries can reimagine their IT by cloud technology adoption
When it comes to cloud technology adoption, the financial sector is lagging. While some challenges impact all sectors, regulated industries like financial services have a particularly complex landscape to navigate. And their challenges require targeted problem solving.
To effectively modernise their IT, regulated industries must address three thorny, overlapping challenges to begin cloud technology adoption:
- Outdated legacy technology
- Cybersecurity risks
- New working styles and employee expectations
The good news is that financial firms of all types can address industry disruption, hybrid work needs, cybersecurity, and compliance, provided they adopt the right approach to IT modernisation. That journey starts in the cloud.
This doesn’t mean organisations need to make the leap in one go; in fact, more regulated corners of the industry prevent some firms from doing so. Yet there are concrete, powerful steps that virtually all financial services organisations can take today to adopt a more dynamic IT posture and prepare for the business and regulatory environments of tomorrow.
By taking a deeper look at the challenges blocking their path to IT modernisation, financial services organisations can learn how to overcome these barriers (while remaining within compliance) and thrive in the new world of work.
Challenge #1: Outdated Legacy Technology
Many financial services firms run on systems cobbled together over a period of years, if not decades. This technology debt can complicate adding even the lightest of new technologies, while also hindering their ability to meet evolving customer and employee needs.
More specifically, the financial services tend to struggle in onboarding and supporting employees in a fast and efficient manner; providing hybrid employees with the tools they need, wherever they are; and in troubleshooting and updating existing systems rather than focusing on higher-value activities.
IT modernisation, even if it’s halting, can help. By moving parts of their enterprise to the cloud, firms can (finally) start supporting microservices, APIs, and DevOps. Doing so helps increase business agility by allowing organisations to open new locations more quickly, consolidate branches, rapidly launch new product or service offerings, and accelerate the time to value from significant changes like mergers, acquisitions, and divestitures. These steps can also reduce IT troubleshooting, which frees tech teams to do more higher-value work.
By offloading certain functions to the cloud, financial organisations begin to eliminate technical debt caused by legacy systems, while starting to cultivate an organisational culture that attracts and retains talent, too.
Challenge #2: Cybersecurity Risks
The financial services industry is awash in data: customer data, firm data, employee data, trading data. All this information must be secured but also be accessible to those who need it, when and where they need it. Without a robust security infrastructure, organisations are at greater risk of inadvertently leaking data or being hacked.
A broader and deeper attack surface requires new thinking and new technology. Having shifted to a hybrid work model, many employees are often logging on via their personal devices. Data must be protected and encrypted as it travels from initiation point to final destination. Meanwhile, firms must also adhere to compliance regulations without hampering business goals.
To meet this moment, the financial services industry should apply zero trust best practices, ensuring employees can access the data and systems they rely on, wherever and however they’re working. Securing sensitive apps and data on-prem or in public cloud platforms can help financial services firms more effectively protect sensitive information, enhance corporate security, respond to compliance mandates, and reduce their audit footprint. By adopting zero trust, firms can also begin encrypting data in motion, containerising and wiping data from mobile devices, restricting the sharing and copying of data, and closely partitioning protected data — further bolstering security and compliance.
There’s a business case for these IT improvements, as well. Indeed, strengthening data protection, enabling rapid recovery from security incidents, and supporting business continuity will reduce risk and increase resiliency. Protecting data anywhere and everywhere isn’t simply the right thing to do, it’s imperative.
Challenge #3: New Working Styles and Employee Expectations
Just because employees may be working from home or on a hybrid schedule doesn’t mean they have different needs than on-prem employees. Relationship managers, personal bankers, roaming branch staff, and loan agents need to be able to access their applications, information, and data on a single aggregated workspace — whether on their personal device or corporate-owned, personally enabled (COPE) device — without compromising sensitive client or personal information. Meanwhile, customers expect a higher level of security and less friction at all points of service.
The savviest financial services professionals innately understand that they can hedge risk by diversifying and staying flexible. It’s no different for the IT leaders who evaluate and implement practical and intelligent IT strategies. Desktop as a service, or DaaS, helps banks provision and manage employee resources in any location more easily. This means they can adapt readily to changing needs and simplify IT operations in the future, making it simple to roll out new products and solutions for employees as well as customers.
Even as workstyles and expectations change, the financial services industry can protect distributed employees, applications, devices, and networks by adopting a more supple, resilient security model.
In finance, as in any industry, IT modernisation is not a one-and-done project, nor is upgrading enterprise technology — or building the infrastructure to support it — a negligible expenditure. But done tactically and with a lens on the future, IT modernisation can be simple, secure, efficient, and yes, cost-effective. Indeed, a 1 percent increase in innovation spend leads to an estimated 1.95 percent increase in overall revenues.
Firms can achieve the agility needed to compete in today’s rapidly changing market, while delivering the modern, flexible experiences demanded by both customers and employees. That’s something everyone can feel bullish about.
Enterprise Solutions can help financial services organisations provide employees and customers with secure instant access to apps and data on any device, over any network or in any cloud environment, as well as the expertise and agility from a elite in-house team of engineers .
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