Challenger banks have shown what’s possible in the Financial Services sector – new ways of banking, trading as well as modelling and managing risk. As financial services brands consider the next five years, hybrid IT offers the greatest flexibility for developing next generation products and services.
As customers increasingly exchange physical for digital experiences, those digital experiences can’t be good – they must be excellent.
According to recent PwC research, customers will pay a premium of up to 16% for a better experience, and 63% would share information in exchange for a better experience.
What’s good for customers is good for business. One leading global financial institution developed new technologies to ‘personalize every conversation’ following extensive customer research. The result was an 8-10% increase in customer spend on services and a 400% increase in retention.
This is a simple model, but one many financial services companies find difficult to follow as legacy systems are a given and departments may work in silos. But the smart use of Hybrid IT systems offers opportunities for those in all types of financial services, not just retail banking.
Hybrid IT offers financial services companies flexibility. Existing on-premises data centers can synchronize with co-located data centers to allow businesses to onboard workloads and applications faster, minimize costs through product innovation, and reduce risks through the highest quality standards.
Alongside that, developments in Edge computing benefit applications that are impacted by latency, network security, and regulatory requirements – ideal for financial services companies.
All this means that businesses can produce products and services that don’t just meet, but exceed customer expectations.
As the economy continues to pivot towards digital, it feeds the data economy. IDC predicts that this “global datasphere” will grow more than five-fold between 2018 and 2025, from 33 zettabytes (ZB) to 175 ZB.
Successful Hybrid IT tends to offer cost savings and efficiencies, but it also simplifies IT infrastructure management for financial services companies, allowing them to change at speed, and adapt to today’s accelerated business cycles.
As Sammy Zoghlami, SVP Sales, EMEA at Nutanix explains, “Old rigid forms of infrastructure fail to meet the needs of businesses that are focused on their customers.” In addition, Gartner research suggests that 30% of digital business projects are damaged by poor customer experience. Zoghlami says it pays to place, “the technology team and its infrastructure choices right at the heart of the bottom line and brand perception of every business, every day.”
Furthermore, as transformation is a process that does not have an end, the need for data centers to be flexible and agile is crucial. A botched digital transformation now will leave your business unprepared for what’s around the corner tomorrow.
Latency, connectivity and the Edge
Latency is of crucial importance to financial services companies and it’s easy to see why. Just 5ms of lag could cost $20m, assuming each millisecond costs around $4m across transactions according to a study by the Tabb Group.
This means that latency is less about efficiency, and more about profitability.
New innovations like Edge computing can give many financial institutions an advantage by bringing the analysis closer to the data, reducing latency and increasing your competitive edge.
Edge computing has been developed to deal with the vast influx of data from the modern world. Edge approaches have already been developed in areas like ATMs and banking apps.
Stephan Fabel, director of product at Canonical, says, “Only by reducing network latency can the next generation of customer-facing services be realized within bank branches, at ATMs and point-of-sale services.”
He says Edge computing may now have more relevance for investment banking, the sector that will, “look to capitalize on this opportunity, using advanced analytics, enabled by Artificial Intelligence and machine-learning, to process huge amounts of data on the Edge, and better predict market behaviors.”
By switching to Edge computing, financial services companies can crunch data more quickly for faster and more relevant insights. In addition, as limitations associated with the opening and closing of markets begin to erode, consumers, businesses and traders will be able to move markets at any time of the day or night, and reduced latency will be a crucial consideration.
Speed is not just relevant for traders. One example of how details are so important to building a positive and compelling customer experience comes from website load times. Google penalizes those websites that load slowly. If a website takes more than 2 second to load, customers notice. In addition, the bounce rate increases dramatically the longer a page takes to load, up by 32%, as the load time increases from 1 to 3 seconds.
The details matter and it’s the underlying infrastructure that gives financial services businesses the ability to manage the details and give customers more compelling experiences.
Flexible and future-proof IT
This move to distributed networks at the Edge benefits applications affected by latency, network security, and regulatory requirements. Processing at the Edge requires a simple and fast setup, remote monitoring and management, reliability, environmental protection, and security.
Panduit has a unique position in offering Edge infrastructure with pre-configured options that put the right components in the right enclosure for the application. Pre-configured, intelligent products and solutions enable and support remote monitoring and management, and cabling and connectivity for reliable performance, no matter the location.