APAC ambitions for the FSI sector are centered on digital transformation to address business and societal shifts.
2020 accelerated the transformation of financial services faster than many other sectors as the need for digital banking, epayments, insurance, customer and support services across the region grew exponentially.
Historically slower to deploy new technologies, given the amount of security and compliance requirements inherent to FSI businesses, it’s a very interesting time for innovation in the sector as banks and financial institutions have had to respond to deliver digital services and retain and engage customers through the COVID-19 pandemic.
As the industry looks to technology to redefine services and build out a more valuable digital value chain in 2021 and beyond – through conversations with customers and research conducted as part of its annual Financial Services Enterprise Cloud Index Report measuring enterprise progress in cloud adoption – Nutanix has observed some key APAC trends and tech priorities for FSI that will be important for achieving the region’s transformation policy objectives and enabling the industry to respond and capture new opportunities in the face of business and societal shifts.
DigiconAsia discussed some of the key findings of the study with Matt Young, Senior Vice President & Head of Asia Pacific and Japan, Nutanix:
What are the key reasons for the hybrid cloud model showing positive growth among the financial services sector globally? Are these the same reasons for Asia Pacific?
Young: The past 12 months have made companies in just about every sector think about ways they can adapt and innovate, and the financial services sector seems especially motivated to upgrade itself. Customer behavior is behind this change in mindset. By this I am talking about the ongoing shift to digital banking. The majority of customers bank digitally every week, and around a quarter have stopped in-person banking altogether.
The trends we are seeing in Asia-Pacific are similar to those we are seeing globally. Put simply, financial services companies need to be able to keep up with customer demand for things like ebanking and epayments, which has risen during the pandemic, and the hybrid cloud model helps them do this.
They want to become more agile, which means automating manual activities and developing digital products to improve customer service. They see the best foundation to build this infrastructure as the hybrid cloud. Bearing in mind the regulatory and security requirements specific to the financial sector, a hybrid cloud model means companies in this space benefit from the flexibility of the public cloud and the high level of control that comes with the private cloud.
How does hyperconverged infrastructure help with deploying hybrid clouds? Any examples in the Asia Pacific FSI sector that you can share?
Young: The hybrid cloud gives financial services companies a base from which to improve their services. But there is another foundation to the hybrid cloud itself – hyperconverged infrastructure. This is really about making things simple and scalable.
A hyperconverged infrastructure simplifies data center modernization and makes it possible to bring together private and public clouds, which we term ‘clusters’. This is important when we consider that all businesses want is to be able to manage multiple clouds seamlessly with other tools and data.
An example of a company that we helped modernize its data center based on this technology is RBL Bank in India. Building its architecture on Nutanix Enterprise Cloud has helped it make database administration up to 90percent more efficient. What this means in practical terms is a better-run call center, faster marketing of services, increased sales of things like credit cards, and much lower customer acquisition costs.
One area of concern in deploying hybrid cloud is the shortage of talent skilled in cloud-native technologies such as containerization. What could Asia Pacific financial service providers do to bridge this skills gap?
Young: Talent shortages are always likely to be an issue, and our research shows 34% of people think their IT department lacks skills in container and cloud-native technologies. But technology offers ways to deal with the skills gap.
The key here is building an architecture that minimizes the reliance on individuals. Financial services companies (and all companies for that matter) need a flexible and transparent system so that if someone leaves, others can easily understand how it all works.
Having a hyperconverged infrastructure in place gives you more of that transparency. Part of the aim of our clusters product is in fact to address a shortage of skills. By giving easy, direct access to cloud-native services, it enables companies to extend skillsets and tools across private and public clouds, allowing them to do more with less.
By adopting an approach of extending the private cloud to the public cloud, rather than the other direction, companies can work with systems, tools, and processes they understand today, while using the hybrid capabilities as an on-ramp to consuming public cloud offerings. By starting the familiar on-prem technology stack and expanding into the cloud, they allow their teams to up-skill gradually, as needed, rather than fighting for scarce cloud-native talent.