Driven by improvements in technology, financial services companies have advanced both internal and external systems and processes, with the likes of digitisation, personalisation and risk management redefining the industry. It's also not surprising that cloud computing and data are a huge part of this evolution.
Across Australia and New Zealand (ANZ), cloud uptake has grown exponentially and now represents a significant proportion of the overall IT software market. In fact, at the end of 2021, expert analysts at the International Data Corporation (IDC) found that within ANZ, cloud revenues grew 31%, to represent 45% of the total software market.
Meanwhile, GlobalData expects the cloud computing market in APAC to hit $191.8 billion by 2024, witnessing a CAGR of 7.7% between 2019 and 2024.
Pandemic-induced disruptions, evolving consumer behaviour, and extreme competition have also attributed to hybrid and multi-cloud environments as the new normal of computing. At present, 80% of organisations throughout the world 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 pick and choose individual cloud offerings to suit specialised needs. The ease at which stakeholders can share and access data with a hybrid cloud encourages a data-driven culture and helps companies to accelerate time to insight. It also helps fuel growth while still providing security and control over data, enhances 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 benefit of an enterprise data strategy
Data plays a critical role in modern financial markets and industries today more than ever. When speaking to our customers, one of the most prevalent issues is the struggle to manage and analyse huge volumes of data that they continue to collect. With multiple systems and platforms feeding data around the organisation and around the clock, good data governance and management are paramount to avoid 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 finance industry across APAC, with 77% of senior decision makers (SDMs) and 58% of IT decision makers (ITDMs) saying their organisation is doing so.
Overall, the report found that 83% of SDMs and 81% of ITDMs also report their organisation has an enterprise data strategy in place, and 96% of SDMs agree that it's important to optimise data management within organisations. When it comes to monetary fallout, SDMs report annual losses of $125,882 because of missed opportunities involving data.
A robust data strategy will go a long way to ensure businesses are able to truly capitalise on the benefits of hybrid and multi-cloud solutions, such as improving customer experience and facing data challenges.
Hybrid and multi-cloud innovation halted by silos and security issues
As financial services companies move quickly to the cloud, those uninformed of data integration challenges and disadvantages of closed-source ecosystems often find their organisation's data siloed. These silos hinder hybrid data cloud and multi-cloud innovation and prevent stakeholders from extracting meaningful business insights from data.
Silos and closed-source technologies also make data governance and security across hybrid cloud and multi-cloud environments a challenge, which is of growing concern for the financial sector. The process of integrating technologies with proprietary data catalogues and security policies can be tedious, difficult and time-intensive, wasting significant resources while also introducing risk.
Silos and proprietary security also limit businesses' visibility of their data lineage, preventing enterprises from establishing proper audit trails and managing risk, making compliance challenging 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's organisation-wide, integrated, governed and secure. We work with companies in some of the most highly regulated industries in the world, including financial services, and it's absolutely imperative that the highest levels of security governance and metadata management are provided.
Cost issues lurk in the shadows of digital transformation
Though hybrid and multi-cloud architectures have the potential to reduce costs considerably as businesses enter new phases of digital transformation, when mismanaged, they can also contribute hugely to overheads. Silos and a lack of data governance and visibility can lead to cloud sprawl, which describes when businesses lose track of where applications are hosted or when applications are not being run efficiently.
Some cloud services are priced based on the consumption of compute resources, and others may charge by data scanned per query basis or bandwidth. Enterprises unfamiliar with the diverse variety of pricing, fee and infrastructure sizing models used by different vendors often end up racking up high costs as they struggle to stop sprawl.
Enterprise data strategies eliminate silos and build data governance
Our EDC report found that 91% of SDMs believe making sense of data across hybrid, multi-cloud and on-premises architectures would be valuable. Nearly all (91%) of ITDMs agree that organisations that implement a hybrid architecture as part of their data strategy will gain a competitive advantage.
To break free of silos and rise above competitors, companies should ensure that their enterprise data strategy and architecture facilitates the quick, free flow of data between all environments. This can be done by picking and integrating a best-of-breed suite of compatible technologies in a manageable platform that aligns with its business goals.
Open-source technologies such as Kubernetes and Apache Spark offer excellent compatibility, interoperability and control, allowing businesses to simultaneously store, manage and secure data across multiple cloud vendors. They also enable enterprises 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 state that having secure, centralised governance and compliance over the entire data lifecycle is valuable when handling and managing data. To ensure proper data governance, the businesses' enterprise data strategy should use a unified security model to enforce a consistent set of security and data governance policies across all on-premise and cloud environments.
While open-source technologies help businesses gain better control over which workloads are run and what data can be accessed, a unified security model helps organisations apply fine-grained security policies with a full data lineage and audit trail crucial for ensuring data integrity and compliance no matter where data resides.
Preparing for today's hybrid and multi-cloud challenges
As the highly regulated financial services industry pursues ambitious growth through cloud, organisations will be under more scrutiny and mandated to meet higher security and governance standards. Similarly, banks and financial institutions also face increased pressure to provide modernised and agile customer and employee experiences.
Before starting out, financial services organisations must conduct a comprehensive data strategy review with all stakeholders to ensure that the enterprise has covered all its bases for today's fast-paced environment. This includes a full assessment of the multi and hybrid cloud environment's scalability, availability and key resource metrics for running workloads - along with the associated fees and vendor contracts.
A hybrid data cloud strategy should work towards optimising cloud workloads but also be cost-flexible enough to encourage innovation. This keeps the organisation agile now and adaptable to evolving future needs. By using a well-planned, well-executed enterprise data strategy to drive a company's cloud strategy, enterprises can leverage the cloud to drive business success.