Article by Stevie Walsh, cloud director of Cloudera APAC.
Driven by technological improvements, financial services firms have advanced internal and external systems and processes, with digitization, personalization and risk management redefining the industry. It’s also not surprising that cloud computing and data play a big role in this evolution.
In Australia and New Zealand (A/NZ), cloud adoption has grown exponentially and now represents a significant share of the overall computer software market. In fact, by the end of 2021, expert analysts from the International Data Corporation (IDC) found that within A/NZ, cloud revenue grew by 31%, to account for 45% of the total software market. .
Meanwhile, GlobalData expects the cloud computing market in APAC to reach $191.8 billion by 2024, growing at a CAGR of 7.7% between 2019 and 2024.
Pandemic-induced disruptions, changing consumer behavior, and extreme competition have also cast hybrid and multicloud environments as the new normal of IT. Today, 80% of organizations worldwide have already adopted a hybrid cloud strategy and 89% a multi-cloud strategy, according to Flexera’s 2022 State of the Cloud Report.
These cloud-based architectures are also highly controllable, easily scalable, and cost-effective, allowing financial services companies to choose individual cloud offerings to meet specific needs. The ease with which stakeholders can share and access data with a hybrid cloud encourages a data-driven culture and helps companies accelerate time to insight. It also helps fuel growth while ensuring data security and control, improves customer centricity, improves regulatory compliance and security threats, and reduces unnecessary complexities. This is crucial when dealing with investments, funds and sensitive customer information.
The Undeniable Advantage of an Enterprise Data Strategy
Data plays a vital role in modern markets and financial industries today more than ever. When we talk to our customers, one of the most common issues is the difficulty in managing and analyzing the huge volumes of data they continue to collect. With multiple systems and platforms feeding data across the organization and around the clock, good data governance and management is paramount to avoiding reputational and financial damage.
According to Cloudera’s Enterprise Data Cloud Maturity (EDC) report, improving customer experience and satisfaction is an area where data and analytics are used in the financial industry across APAC, with 77 % of senior decision makers (SDM) and 58% of IT decision makers. (ITDM) saying their organization does.
Overall, the report found that 83% of SDMs and 81% of ITDMs also say their organization has an enterprise data strategy in place, and 96% of SDMs agree that it is important to optimize data management within organizations. In terms of monetary fallout, SDMs report annual losses of $125,882 due to missed opportunities involving data.
A robust data strategy will go a long way to ensuring businesses are able to realize the full benefits of hybrid and multi-cloud solutions, such as improving customer experience and resolving data issues.
Hybrid and multi-cloud innovation held back by silos and security issues
As financial services companies rapidly migrate to the cloud, people unaware of the challenges and drawbacks of integrating data from closed-source ecosystems often find their organization’s data siled. These silos hinder hybrid and multi-cloud data cloud innovation and prevent stakeholders from extracting meaningful business insights from the data.
Silos and closed-source technologies also make data governance and security in hybrid cloud and multi-cloud environments a challenge, something of growing concern to the financial industry. The process of integrating technologies with proprietary data catalogs and security policies can be tedious, difficult, and time-consuming, wasting significant resources while introducing risk.
Silos and proprietary security also limit companies’ visibility into their data lineage, preventing companies from establishing proper audit trails and managing risk, making compliance difficult and inviting cybersecurity threats.
Many companies new to multi and hybrid cloud often rush through setting up environments without a proper enterprise data management strategy that is organization-wide, integrated, governed, and secure. We work with companies in some of the most regulated industries in the world, including financial services, and it is absolutely imperative that the highest levels of security governance and metadata management are provided.
Cost issues lurk in the shadows of digital transformation
While hybrid and multi-cloud architectures have the potential to significantly reduce costs as businesses enter new phases of digital transformation, when mismanaged they can also contribute significantly to overhead. Silos and a lack of data governance and visibility can lead to cloud sprawl, which is when companies lose track of where applications are hosted or when applications aren’t running efficiently.
Some cloud services are priced based on compute resource consumption, while others may charge for analyzed data per request or per bandwidth. Companies unfamiliar with the diversity of pricing, fee, and infrastructure sizing models used by different vendors often end up racking up high costs as they struggle to stop proliferation.
Enterprise data strategies break down silos and strengthen data governance
Our EDC report found that 91% of SDMs believe making sense of data in hybrid, multi-cloud and on-premises architectures would be valuable. Almost all (91%) ITDMs agree that organizations that implement a hybrid architecture as part of their data strategy will gain a competitive advantage.
To break free from silos and stand out from competitors, companies must ensure that their enterprise data strategy and architecture facilitates the rapid and free flow of data between all environments. This can be done by choosing and integrating a suite of leading compatible technologies into a manageable platform that aligns with its business objectives.
Open source technologies such as Kubernetes and Apache Spark provide excellent compatibility, interoperability, and control, allowing enterprises to store, manage, and secure data from multiple cloud providers simultaneously. They also allow companies to avoid vendor lock-in and benefit from open source ecosystem partnerships and rapid community innovation.
The report found that 94% of SDMs and 86% of ITDMs say that secure, centralized governance and compliance across the entire data lifecycle is helpful when processing and managing data. To ensure good data governance, the company’s enterprise data strategy should use a unified security model to enforce a consistent set of data governance and security policies across all on-premises and cloud environments. .
As open source technologies help enterprises better control the workloads they run and the data accessed, a unified security model helps enterprises enforce granular security policies with full data traceability and a crucial audit trail to ensure data integrity and compliance no matter where the data resides.
Prepare for today’s hybrid and multi-cloud challenges
As the highly regulated financial services industry pursues ambitious growth through the cloud, organizations will come under greater scrutiny and be required to meet higher security and governance standards. Likewise, banks and financial institutions are also facing increased pressure to deliver modernized and agile customer and employee experiences.
Before getting started, financial services organizations should conduct a comprehensive data strategy review with all stakeholders to ensure the business has covered all of its bases for today’s rapidly changing environment. today. This includes a comprehensive assessment of scalability, availability, and key resource metrics of the multi and hybrid cloud environment for running workloads, as well as associated fees and vendor contracts.
A hybrid data cloud strategy should aim to optimize cloud workloads, but also be cost flexible enough to encourage innovation. This allows the organization to remain agile now and adaptable to changing future needs. By using a well-planned and well-executed enterprise data strategy to drive a company’s cloud strategy, companies can leverage the cloud to drive business success.