By George Pawlyszyn, General Manager, Middle East and Africa at Rackspace Technology
Financial institutions have their work cut out for them. While the need to remain agile is a business imperative due to shifting consumer demands and a rapidly changing technology and competitive landscape, legacy infrastructure and complex regulatory regimes make the transition challenging.
Then there’s the ever-present cybersecurity threat, with financial firms being up to 300 times more likely than other institutions to experience them, according to the Boston Consulting Group.
Luckily, cloud environments suitable for financial services organizations have matured rapidly in the recent past, and when guided by the right partner, financial institutions in the Middle East can migrate and leverage cloud-based infrastructure seamlessly. A proper cloud strategy should address existing infrastructure, security, compliance, and expertise within a multicloud environment.
With the amount of data and a myriad of applications, the financial industry’s data center footprint is understandably extensive. Most banks and other financial institutions worry, rightly so, about concurrent CAPEX and OPEX models with any typical rip and replace model. It doesn’t have to be so. The right cloud migration plan should include streamlining existing data center infrastructure and then ramping up cloud adoption over time while leveraging hybrid cloud benefits.
Increased investments of cloud data centers in the region by companies such as AWS and Microsoft have been a godsend for financial institutions. Local infrastructure addresses a central sticking point for: strict data residency and sovereignty laws. A secondary benefit is the opportunity to benefit from the latest technologies such as AI without the financial and technical outlay they would otherwise incur. A report by Rackspace Technology, Are Organisations Succeeding at AI and Machine Learning? indicates that while many organizations in EMEA are eager to incorporate AI and ML tactics into operations, they typically lack the expertise and existing infrastructure needed to implement mature and successful AI/ML programs.
Most of us can barely remember a time before banking apps. The experience of carrying out financial transactions on mobile has been life-changing. On the flip side, customers now demand more mobile-based services and greater personalization. Customers want a seamless omnichannel experience where the mobile, web, customer service, and branch blend into each other. An integrated omnichannel strategy that encompasses security, compliance assistance, workload optimization and data management goes a long way when switching to a new cloud-powered customer experience. Another study by Rackspace Technology, How Applications Impact Customer Experience, shows that customer experience is a top priority for most UAE businesses, including financial institutions, with 62% saying modernizing technology and applications to improve customer experiences drive real-world, bottom-line benefits.
Unlike other businesses where the direct financial hit from cybercriminals is the primary concern, the loss of trust by customers could have an even more significant impact on banks and other financial institutions. Further, sophisticated cybercriminals are keen to exploit gaps in your multicloud strategy. Working with a partner that puts security at the heart of cloud deployment is imperative.
Financial institutions are increasingly taking the managed services route, offloading their cloud migration and management services to experts to focus on their core business. This is especially important for managed security services where technology providers can deliver superior cyber defense backed by global security operation centers. A dedicated technology company also allows service providers to innovate in new technologies such as IoT and AI, where a lack of skills impedes adoption.
Fintech is all the rage, but the demise of traditional finance is highly exaggerated. Financial institutions in the region have adopted highly modern cloud-based services that has seen them thrive in a very dynamic environment. Cloud allows even the oldest banks to innovate like fintechs, while leveraging market know-how and a deeper understanding of their customers.