Financial services is becoming a digital business, and that digital heartbeat brings with it many opportunities as well as significant challenges. Clients today are much savvier and have higher expectations for exceptional digital experiences, and traditional asset and wealth managers, banks and insurance companies are under intense competitive pressure, not only from one another, but from non-traditional entrants new to the market. To remain relevant, financial institutions need to deliver superior client experiences across channels, remain agile to navigate the changes, reduce costs and improve operational efficiencies, and most importantly, innovate. At the recent Gartner Symposium/ITxpo 2017 in Orlando, I shared how application modernization can help financial services institutions do just that.
Technology evolves at light-speed, compared to the processes and organizational structures that make up financial institutions and the market as a whole. Beginning around 2010, consumerization was on everyone’s minds and was spurring on new ways for consumers to interact with their banks and other financial institutions. Mobile devices have become the norm for banking, conducting trades and more, and financial services institutions had to move quickly in developing the mobile applications and services for a variety of devices. Now, the industry is in the midst of a full-on digital transformation that could ultimately change the way they do business.
Throughout this evolution, and even more so now, financial services institutions have to move beyond the technology. IT leaders at financial services institutions should consider adopting next-generation architectures and come up with new ways of developing, delivering and integrating applications. More specifically, they should follow a DevOps approach, implement cloud-native applications and develop agile processes across both the IT and the business units. It’ll take work, in particular they’ll have to address the existing systems they now have. And they’ll have to address the business culture that has permeated financial services firms for many years but may not be well-suited for digital enterprises.
Of course, IT will have to continue tackling challenges on a number of fronts. It can be a struggle to keep up with the constant demand for new applications, and where there’s a gap, shadow IT often steps in. Security can also be daunting, especially since application misconfigurations can result in security breaches.
Modernization can set financial services firms on a positive path to continuous delivery of new and innovative capabilities, and I recommend firms focus on these four priorities:
- Optimize the applications you have to gain efficiencies
- Integrate applications, data and processes to improve productivity
- Add and manage cloud infrastructure to increase agility
- Build more modern applications to move faster
Also an important recommendation: use open source, a key enabler of community-based innovation. The open source communities drive many new features and functions through lots of collaboration and input, and the work is transparent. Problem-solving is done together, which can accelerate solutions and drive standardization.
Financial institutions need trusted partners who are uniquely positioned to provide support in the challenging and increasingly competitive environment that is financial services industry. Of course, we believe the most ideal partners are open source proponents, but you’ll need more than just open source. You’ll need a parther who provides access to:
- User interfaces
- Input into future technologies through upstream submissions
- A more secure value chain
- Quality assurance (QA) and integration
- Predictable, stable lifecycle management
Red Hat’s portfolio of open source solutions for automation, common management and integration — including Ansible, Red Hat Insights, Red Hat Satellite, and Red Hat OpenShift — can help simplify and accelerate technology innovations including automation, hybrid cloud infrastructure, containers and application development.