Julian Moffett, CTO of Banking, Financial Services and Insurance at EnterpriseDB
As financial organisations shift to new digital operating models to compete and stay relevant, data has become a valuable currency – and it’s the ownership, proper management of, and accessibility of data that offers a competitive edge.
This means that databases have become strategic assets and to reap the greatest rewards businesses need to deploy database technology that is secure, reliable, and scalable. To achieve these objectives, businesses in the banking, financial services, and insurance (BFSI) sector are already pursuing open source solutions for their database needs.
For many BFSI companies, accomplishing their database goals has been much more than an exercise in cost reduction. Successful database strategies support business and technology objectives — which can lead to cost optimisation but also help improve developer productivity and agility, attracting and retaining talent, and enabling innovation and faster time to market. Here are the top three strategies that BFSI companies can implement to overcome these pain points and support their priorities.
Amid global macroeconomic uncertainty, companies in the BFSI companies are constantly searching for ways to reduce costs (some, even while simultaneously announcing record profits). Optimising operating costs has become paramount for sustaining profitability and growth. Without commercial flexibility in a vendor partnership agreement and without disciplined IT estate management, these expenses can quickly spiral out of control. Those companies opting to remain with proprietary databases for their database management requirements inevitably face challenges with high operating expenditure and often find themselves locked into restrictive commercial constructs.
Legacy systems can come with substantial licensing fees as well as year-on-year increases in support costs, technically challenging maintenance routines, and limited scalability, all of which cause operational expenses to continue rising. Instead, choosing open source platforms and moving to Postgres – the most admired and desired database according to Stack Overflow’s 2023 Developer Survey(https://survey.stackoverflow.co/2023/) – offers BFSI companies an opportunity to break free from vendor lock-in and regain commercial control. Companies are often initially attracted to Postgres to improve cost management but then remain and expand Postgres utilisation as a result of the innovation possibilities it unlocks.
Agility and responsiveness are crucial qualities for BFSI organisations seeking to successfully navigate market fluctuations, and having inefficient legacy IT processes can undermine their ability to do so. When adopting open source solutions, BFSI companies can renovate and re-energise their database estates. Introducing a new platform provides a perfect opportunity to increase automation, embrace shift-left, improve security, and empower database consumers. The capacity for bespoke tailoring to what’s most relevant for the firm can offer significant benefits such as platform consolidation and improved user experience.
Aside from platform ease of consumption and operability, it’s vital that BFSI businesses maintain uptime to maximise revenue generation and protect themselves from data breaches. Downtime is highly detrimental to customer satisfaction, and leaks of financial or other privileged, confidential client data can be fatal for firms from a legal and wider reputational perspective. A Postgres provider who can address the challenges of high availability and minimise disruptions resulting from unplanned issues, as well as required maintenance, will ultimately help deliver a seamless service to end customers. These firms can focus on serving and retaining their customers with their reputations intact, knowing they can rely on industry-leading high availability, decades of Postgres expertise and methods like Transparent Data Encryption (TDE) to maintain data integrity.
Facing the future
Sourcing and retaining the right talent to drive innovation is a struggle for companies across several industries. This challenge is especially felt by BFSI executives. Staff growth and skills renewal is critical to continue offering quality services and winning new business. It is a balancing act — particularly for organisations operating at scale — to retain institutional knowledge and incentivise learning and growth, while also attracting new talent.
Faced with this, businesses ought to make sure their tech stack aligns with their talent needs. While cost reduction may be the initial promise of Postgres, developers stick with the technology for its functional richness and flexibility. BFSI firms that choose to adopt these solutions will attract professionals from a very diverse, vibrant, and active Postgres community to drive their business forward.
The organisational scale and complexity of BFSI companies can complicate technology development, particularly in support of cross-line-of-business processes. It is critical that tech platforms can be applicable for use across silos to facilitate collaboration and data exchange. This is even more reason to opt for open source –where collaboration is inherently integrated – in stark contrast to the constraints imposed by cumbersome legacy databases that have historically been the standard in the sector. When these firms decide to move, their journey can be made much smoother with an experienced partner, capable of decreasing the complexity of the existing architecture, shortening the migration process, and reducing its costs, while ensuring data security and compliance along the way.
All things considered
As more and more businesses shift to digital environments, open source is the way to go with your technology stack. Progressive companies are leading the way by moving their database management to Postgres, recognising the platform’s ability to cut costs and increase flexibility.