Investing in Growth: Robust Technology Infrastructure for Financial Institutions
Introduction
The online space is flooded with discussions on AI/ML and its impact on the future and on literally everything under the sun. Its impact on financial services has been discussed enough too. But for a moment, let’s take a pause and get to discuss something more basic, but often overlooked or managed inefficiently.
And yes, we are talking about technology infrastructure services, which many term as the foundation or the backbone of a seamless/frictionless banking experience. You would agree that sloppy infrastructure management has a direct bearing on customer satisfaction, brand perception, regulatory compliance, and potential future business.
Competition is stiff nowadays for customers to move to competition, thanks to technology—it’s just a click away. Also, with the increase in the volume of data that financial institutions consume, only attracting stricter consumption and distribution regulations.
Always up and running:
Our experience of speaking to banking clients, reiterates the reality that infrastructure management is still a concern for financial institutions and it can be a deal breaker in many ways for banking customers. Financial institutions today require a robust infrastructure built with redundancy, optimum failover mechanisms, proactive monitoring, and continuous uptime, which minimizes the risk of disruptions. Let’s look into some of the critical aspects that FIs need to be wary of:
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High Availability Systems: The need for redundant hardware and software such that one system automatically and immediately takes over when the other fails is the need of the hour. This often means that while sizing infrastructure requirements, there’s enough and more foresight to predict business growth and expansion, predicting complexities with regards to the growth of data and local regulatory rules to comply.
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Disaster Recovery Planning: A fail-proof plan that fortifies infrastructure against risks such as natural calamities and cyberattacks, ensuring minimum downtime, data, and reputation loss.
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Proactive monitoring and maintenance: A robust system in place to continuously monitor critical systems to ensure timely interventions such that minor issues are fixed then and there and do not escalate into major problems.
Cost Savings: The Need at Every Hour
Smart infrastructure management ensures long-term cost savings. It is critical to focus on cost, as we have often seen huge infrastructure spends on systems not being used or optimized well. FIs need to ensure:
- Costs relating to downtime: There are significant costs to be incurred for lost transactions, data recovery, and reputational loss. Also, downtimes often act as a trigger for customers to shift.
- Increased operational efficiency: Infrastructure, when not planned well, has a domino effect with multiple areas getting affected. Automating manual tasks helps in ensuring optimal resources and infrastructure systems across databases, middleware, servers, and applications.
- Reduced risk and regulatory fines: Compliance and security measures with regard to infrastructure ensure regulatory fines are at bay and do not cause any damage.
Efficiency: Streamlining Operations and Empowering Employees
As mentioned earlier, by getting the basics right by having streamlined operations and automated processes, employees feel more empowered to focus on core objectives of customer service, innovation, and other strategic areas. The burden of internal IT being tied to infrastructure-related bottlenecks reduces.
- Automation: By automating tasks related to reconciliation, processing, and reporting, employees get freed up valuable time that can be put to better use.
- Decision Making: Robust database-related infrastructure aids in collecting, analyzing, and making sense of large amounts of data to gain actionable insights into customer behaviors, market trends, and risk management. All of this leading to better business outcomes.
- Scalability: Scaling up or down has to be seamless and with good infrastructure management practices that support business decisions at different junctures of organizational growth. Leveraging cloud technologies plays a critical role in ensuring technology supports business needs across time.
Gaining An Edge Over Competition: The Need For Speed
A robust infrastructure gives the agility for FIs to plan for the future and be more adaptable to change. It is important that in these dynamic times, often the management’s vision for the organization gets derailed due to bad choices with regards to software, hardware, and infrastructure-related decisions playing a major role. FIs need to understand that with adaptable and powerful infrastructure systems, the following can be seamlessly achieved:
- Develop New Products and Services Faster:Adaptable systems support business growth and do not become a bottleneck to meet customer needs and stay ahead of competition.
- Superior Customer Experience: It is needless to say that with strong infrastructure management in place, customer experience starts taking priority across touchpoints.
- Expanding to new markets: A scalable and adaptable technology infrastructure helps organizations launch products and services without having much to think about borders. This helps stay ahead of competition by designing products and services as per local nuances and quickly addressing changes.
A spend vs. an investment approach:
There’s a mind shift change required when it comes to infrastructure investments. FIs need to understand that to ensure a foolproof future that navigates business through various uncertain times, a strong infrastructure backbone improves efficiency, reduces cost, drives scalability and adaptability, and addresses risk management at different junctures. Growing FIs invest in the future by ensuring strong infrastructure practices and do not cut corners to meet short-term business objectives.
Speak to us to understand how our consulting solutions and products are shaping the future of BFSI.