Banks and other financial services providers in recent years have aggressively embraced digital consumer technology. Whether they’re using iPhones, Androids, smartphones, tablets, or laptops, banking customers can now download well-designed and intuitive apps to remotely open accounts, make deposits and payments, view statements, send money to friends and much more.
But this impressive activity on the front end in some ways is a Potemkin village, behind which are concealed outdated legacy systems – not to mention ‘we’ve always done things this way’ attitudes – which threaten the technological progress financial services firms require to compete in the digital economy.
And while some banking systems have stagnated, an outside ecosystem of finance-related services has proliferated. Loosely labelled the ‘API Economy,’ these services comprise protocols and standards such as the PSD2, a single payment standard for the European Union; and the Open Banking Standard, a guide for how banking data should be created, shared and used.
The issue is, even the sleekest user interfaces in the world hardly matter if an app can’t seamlessly access back-end services, or interact with the API Economy’s rich trove of services and functions.
The ramifications of these types of performance issues can go beyond a customer’s experience to damage a financial institution’s reputation and brand.
As ComputerWeekly.com’s Karl Flinders writes, ‘The digitisation of customer services at banks is not only putting huge pressure on legacy systems but exposing every failure in near real-time. Even news of a small failure that lasts only minutes can be spread to millions via social media.’
Just as damaging as a retail bank service failure may be to a customer, so too are the increasing technological problems impacting the ability of financial services employees to do their jobs. For example; it is crucial for financial planners to access client records in real-time during a remote meeting. Similarly, insurance brokers and commercial lenders frequently need easy and secure remote access to back-end databases and services while meeting with customers in order to inform, educate, and convert to a sale. Legacy IT infrastructure can clearly cost a financial services provider in terms of reduced productivity, customer satisfaction, and regulator scrutiny, maintenance costs, and downtime.
Thus, it is critical that IT decision makers in the financial sector find ways to bridge outdated systems with next-generation, secure digital workspaces and customer-facing technologies. This is particularly important as both customers and employees increasingly attempt to communicate, collaborate, and conduct business remotely using the devices and platforms of their choice.
Enter the cloud
The most effective vehicle for integrating legacy IT systems and services with modern digital and mobile technologies is through cloud computing. Cloud offers the promise of a flexible and scalable environment through which services can be accessed by customers, partners, and employees in real time from any digital device or software platform.
With the right strategy and cloud services provider, banks and other financial services organisations can leverage the cloud to improve customer satisfaction and retention, employee productivity, efficiency, and revenue, while also cutting costs, getting more return on investment from their legacy equipment, and avoiding capital expenditures on system upgrades or replacements.
Consider the case of ING DIRECT, a challenger bank in Australia. As a wholly digital business, it relies on technology to provide its 1.5 million customers with a seamless banking experience. When the bank needed to bring new products to market, however, there was no choice but to schedule service outages – an unwelcome prospect for a wholly online bank. The challenges: Find a way to update its online banking platform without interrupting services; increase the pace of service innovation; and give itself the ability to quickly develop, test, deploy and rollout new online services.
The solution was simple, but had never been done before. ING DIRECT developed the concept of ‘Zero Touch’: a high-performance, flexible, automated private cloud platform for the entire bank. The beauty of the Zero Touch concept lay in minimising human interaction. It would enable ING DIRECT to meet its customers’ online needs by exponentially speeding its release of new products to market.
To make Zero Touch a practical reality, ING DIRECT decided to virtualise and clone all of its banking applications. This would require a single, integrated private cloud with automated IT provisioning and always-on infrastructure.
ING DIRECT consulted Dimension Data, which had already helped the bank to virtualise and clone its banking environment for testing purposes with its ‘Bank in a Box’ platform.
“This time, we weren’t moving parts of the bank to the cloud; we were moving the whole bank to the cloud,” recalls Simon Andrews, Chief Operating Officer of ING DIRECT. “This was not a small scale operation”.
The Zero Touch transformation project enabled ING DIRECT to significantly reduce the number of IT platforms; reducing overheads in the data centre, lowering capital life cycle costs and consolidating in-house technical skills.
Through orchestration, automation and standardisation, ING DIRECT has been able to simplify complex IT processes. This has dramatically decreased the cost of deploying, operating and managing infrastructure
and workloads.
With the automated life cycle management and self-services optimisations made available with the introduction of the Zero Touch private cloud, the ING DIRECT IT team are more free to focus on strategic planning and business innovation.
“We haven’t partially taken some services and put them in the cloud,” Simon explains. “We have taken the whole bank and put the whole bank in the cloud”.
Choosing a partner
Not every financial services company is ready to make that level of commitment, but all of them today must somehow manage increasingly complex IT infrastructures while also trying to prioritise the customer experience, serve the goals of the business, and continuously reduce costs.
As a global organisation, insurance provider Zurich’s technology environment is absolutely critical in delivering services to customers around the world.
“We want to provide real value to our customers,’ says Collin Molepe, Zurich South Africa’s Chief Operating Officer. In doing so, one of the organisation’s key differentiators is its global footprint. ‘Since we operate in over 170 countries, we really have the ability to craft innovative ways in which we can manage risks on behalf our clients”.
Among the challenges: keeping pace with the rapid evolution of technology and related consumer demands; complicated, time-consuming management of multiple IT partners, leading to ownership and accountability issues; entire IT environment needing to be shut down to relocate data centre.
The solution: A long-term enterprise services outsourcing agreement with Dimension Data, successful data centre relocation to new facility and rationalisation of previous, multiple IT partners to a single supplier. Dimension Data’s breadth of IT services were combined into a single interface using its Enterprise Services (ES) platform.
As a result of the new services architecture, a culture of ‘transformation through operations’ was adopted and IT service efficiency improved. Automation and self-service efficiencies were introduced and the effort required to support the environment reduced as a result. By consolidating the number of service providers from seven to one, Dimension Data also helped Zurich by delivering a better service at a more competitive price.
The age of consumerization and digital technology are rewriting the rules for how financial services providers run their businesses and interact with customers. To succeed in this competitive landscape, these companies must adapt their infrastructures – as well as how they are managed – to improve the customer experience, streamline processes, and achieve the goals of the business.
