Solution guide: Money on the move

The high street in the cloud

From banking and capital markets to insurance and investment, the $20 trillion financial services sector has undergone a technology-driven explosion in recent years. The cloud, ubiquitous connectivity, Covid-19 and the growing dominance of mobile devices have driven unprecedented growth in the number, sophistication, accessibility and uptake of new tools and services. These tools have allowed new cloud-native fintech firms to disrupt the market, as well as enabling existing companies to add to their portfolios with an increased range of services.

Challenger neobanks are tempting customers away from high street firms with user-friendly low/no-fee integrated mobile interfaces. Real-time data orchestration is radically transforming insurance and other services and creating new sources of added value. Crypto currencies are transforming the world of payments and exchange. Mobile-based trading platforms are opening up the stock market to hundreds of thousands of next-gen investors who now account for over 20% of all trades. Loans and mortgages are next in line.

And the risks run both ways. Challenger banks and specialist fintech apps are vulnerable. Not all will succeed in the market and many need backstopping and support from established financial partners. Technology is supercharging change in financial services more than in any other sector. New ideas become new products in months rather than years. Old habits and outdated platforms are quickly exposed as inefficient and costly burdens.

Platforms matter more in this environment. Because technology is the main driver, the digital infrastructure that supports it is critical. Legacy real estate, data centers and systems act as a drag on innovation, leading to missed market opportunities and lowering profits. For established institutions the task is similar to changing the wheels while on the move. Clearly cloud-native services are the answer, but which clouds are the best bet, and how do you reach them securely? And what is the best way to connect existing back-office platforms to the new customer-facing front end?

There is also the burning question of environmental impact. Whatever platform you choose needs to reflect your core values as well as those of an increasingly concerned and well-informed customer and investor base. Will the platforms you choose help you to decarbonize your operations, or will they undermine your right to operate in the face of the current crisis? This publication draws on IMDC’s expertise as well as a range of other industry sources to assess infrastructure needs for financial services firms. How can a financial services business establish an ICT infrastructure that is as secure, reliable and ethical as possible at the same time as thriving in this fast-changing cloud-driven market? And how can you ensure that this new architecture will serve you well - not just today, but for years to come?