Redmond O’Leary, Sales Manager Ireland, InterSystems
As fintechs firmly set their sights on a post-pandemic future, increased investment in cloud is emerging as a top priority for the months ahead. Research from InterSystems has found that improving scalability and reliability is a key driver of cloud investment decisions for over half (52%) of global fintechs, while 48% are motivated by a desire to increase agility.
However, despite the numerous benefits cloud can offer fintechs, many organisations still have substantial technical obstacles to overcome before they can capitalise on these new technologies. In fact, 39% of fintechs currently cite cloud support or multi-cloud deployment and administration as a top technical challenge. With investment set to rise substantially over the next 12 months, how can organisations ensure both they and their customers get the most out of cloud without it becoming just another headache?
Why cloud?
Despite the challenges currently being faced by over a third of fintechs, it is not difficult to appreciate the expanding appeal of cloud. Firstly, the technology opens up the playing field and is a key enabler of agility. With cloud computing, fintechs of all sizes can easily scale to meet variable and increasing data volumes without large investments in IT staff or infrastructure. The significant volume of cloud services available also allows fintechs to focus on their application and differentiation, rather than simply on keeping their infrastructure running.
Cloud additionally offers a variety of capex vs opex benefits. For example, fintechs can quickly run proof of concepts and tests with minimum spend or waiting time compared to other types of infrastructure. Furthermore, cloud plays an important role in helping companies to meet increasingly rigorous compliance standards, enabling fintechs to safely handle sensitive data and keep the focus on their core business.
But before fintechs can fully realise these benefits, they must first face current barriers to effective cloud implementation and support.
Overcoming current challenges
These difficulties are often rooted in an internal lack of knowledge and expertise, particularly regarding security, cost-management, data-locality, and the integration of various services. Cloud management is a sophisticated and intricate endeavour, requiring a specific set of skills to ensure it is carried out safely and efficiently. Therefore, increasing knowledge and training on cloud and cloud support is crucial.
While this responsibility lies with the fintechs themselves, cloud technology vendors also have a part to play in improving the use of cloud services within financial services. Vendors can achieve this by making more specialist fintech solutions available to the industry, so that security and services integration come fully automated in an intuitive customer experience.
Fintechs should now collaborate with technology vendors and leverage the skills and tools they possess to expand their current offering and make more effective use of cloud. For example, many modern data management platforms have the capability to be used in SaaS/multi-cloud environments, with the technology built into their applications and solutions from the ground up. Adopting solutions like these would make it easier for fintechs to use data management technology, while supporting multiple deployment environments, including hybrid and multi-cloud.
Currently, less than a quarter (23%) of fintechs are in the position to offer a hybrid (cloud + on premise) application. This is an avenue that more fintechs should explore, particularly as the vast majority (93%) express a desire to collaborate with traditional banks. As many banks tend to have inflexible IT architectures and concerns about the security of cloud solutions, they may not currently be ready to adopt applications that are fully in the cloud. Therefore, a hybrid offering that is supported by the right technology and accompanied by service decoupling in bounded contexts, clear end-points contracts, standardization, and domain-driven-design, will help fintechs to develop an offering that is more appealing to incumbent banks.
This approach would also allow fintechs to take some of the burden of adopting cloud away from traditional financial services institutions, many of which are reluctant to adopt the technology themselves due to the complexity of integrating it with their existing legacy technology. The clear advantage that fintechs hold, due to not being tied by the same legacy constraints, will enable both parties to work to a mutual benefit.
Unlocking the true value of cloud
As fintechs increase their cloud investment, a wealth of benefits and opportunities lie in wait. But to realise the true value of cloud, organisations must keep a close watch on the costs and complexities of these investments. Needless complications can be avoided by implementing a robust cloud strategy: adopting a cloud agnostic platform and avoiding vendor lock-in will help to ensure that the cloud doesn’t become just another data silo.
Finding the right cloud provider to meet diverse needs will guarantee that both fintechs and their enterprise customers are able to benefit from the scale and agility that cloud offers, and ensure their cloud investments provide real value.
