Long reads

Making Money Moves: How Optimizing Data Architecture Will Deliver Value and Agility

John Ezzell

John Ezzell

Co-Founder & Executive Vice President , BIAS

While the financial industry was once conservative and slower to adopt emerging technologies, 2020 marked a year of rapid and sweeping digital dependence and adoption. As we move into 2021, fintech innovation, particularly as it relates to optimising IT systems to best serve customers and improve internal operations, will be a key factor.

From banks to payment processors, to wealth management firms and across the spectrum of financial services providers, there are strategic data architectures that can be optimized and streamlined to: improve the customer experience, modernise business processes, provide better access to data, increase revenue and help companies become more agile and competitive.

The Importance of Future Fintech Innovation

According to a September 2020 Harris Poll, 69 percent of respondents noted fintech services were a 'financial lifeline' during the pandemic, and 73 percent said those services were the “new normal.”

Customers expect seamless banking experiences, and banks will need to transform their businesses, internally and externally, with forward-thinking technology to enable them to match or exceed customer expectations. The pandemic’s wide-ranging financial impacts will also require banks to reassess their modeling and lending procedures - another area where fintech innovation and analytics will be required.

Agility should be a key focus for financial services providers looking to differentiate themselves in fintech areas such as cryptocurrencies, AI-based analytics, contactless payments, and future shifts towards digital instead of paper-based banking. To achieve true agility and evolution, companies will be required to invest in significant internal system modifications to streamline data architecture.

Oftentimes, transformations of this nature involve collaboration with proven consulting partners with a track record of successful migrations that lower operational costs and usher clients into the modern fintech ecosystem.

Optimisation in Action

For example, one of the Fintech industry’s largest digital transformation initiatives was led by my organization, an Oracle partner and award-winning IT Services company, to help a major U.S. bank with $2 trillion in assets optimise and innovate its business. We offer strategic planning for digital transformation including cloud and database architecture, applications modernisation, and managed services. In this case, an industry-proven methodology was leveraged to consolidate many of the bank’s applications to a maximum availability architecture (MAA) leveraging Oracle Engineered Systems, which prepared it for future cloud adoption. The move provided the bank with an ecosystem for innovation.

In this initiative, the challenge was to overhaul the bank’s legacy infrastructure with more than 5,200 databases supporting 1,500 applications, representing a massive amount of data and architectural complexity. The client’s previous architecture exposed it to several problems, including vulnerability to cyber threats, potential compliance issues, and an overarching lack of reporting and analytics capabilities. Eighty percent of the bank’s IT staff’s time was spent on maintenance of the environment, which precluded them from focusing on innovation and business performance.

The Modern Transformation Strategy

The goals of the project were to enable innovation and system performance while reducing costs, improve the quality of the data and develop analytics to drive strategic forecasting and enhanced business decisions.

A cloud migration framework called, Accelerate™, was leveraged to deliver system automation and standardisation. The methodology contemplated the core data and security issues, upgrading and migrating to the latest Oracle platform, and leveraging a common system architecture to support all 1,500 applications.

The digital transformation solution automated daily infrastructure management tasks, optimised compute capacity, and provided the bank with high-value self-service reporting and analytics capabilities. This transformative initiative for the bank enabled the IT org to focus on driving revenue and positively impacting their customer experience.

Improving Performance While Reducing Costs

Upon completion of the initiative, the bank realized immediate benefits in systems performance, operational efficiencies, and decreased IT expenditures. Infrastructure provisioning improved by 90 percent, and hardware and software costs fell by $40 million per year. Application user experience improved, which led to higher customer retention and satisfaction. In addition, the bank realised an annual savings of approximately $4 million due to reduced needs for database administration support.

The Takeaway

Many financial services organisations are committed to digital transformation and exploring strategic architectures to drive agility and innovation. Modernising IT systems to enable competitive differentiation and customer retention will be critical for a successful journey. For these organisations, collaboration with a proven consulting partner will be vital to ensure the successful execution of these complex initiatives. The stakes are extremely high for the modernisation of IT systems as digital transformation has the power to attract and retain customers, save millions of dollars, and reappropriate hundreds of hours in labor for organisations in the financial services industry.

Comments: (0)