Over the past decade, two significant shifts have occurred in businesses developing and launching digital technologies. The first change relates to the consumerisation of IT. In previous studies, Gartner stated that consumerisation represented one of the major trends likely to impact the IT industry in the coming years. After the demise of the dot.com era, IT budgets declined, and companies began focusing on larger consumer IT markets. This shift altered how technology entered the marketplace, including the finance industry. 

Rather than innovation entering businesses and passing on customers, the customer market would adopt new tech before enterprises. The second significant change has been the rise of digital talent in the workforce and the demand that the corporate technology experience matches the customer-based requirements. People are less reluctant to differentiate between corporate and personal technology or depend on challenging enterprise tools when consumer software is more flexible and effective. The rise of remote working has accelerated this shift, with workers looking to take more ownership of where and how they work.

Rising customer and employee expectations

All of these changes have accelerated the expectations of results from technology for both customers and employees. In society today, customers have very little tolerance for waiting or potential disruption. Customers expect transactions and related processes to be as simple and seamless as possible and are likely deterred by a service if this isn’t the case. With higher expectations for customer experience, flexibility and rapid deployment of new services are a significant part of a leading business.

The finance industry has been impacted by the rise of fintech companies which dedicate themselves to data and are free of legacy systems and the barrier attached to established banks. Utilising modern services and products related to cloud-native technologies, fintech companies have scaled without the high IT infrastructure and development costs often linked with traditional software development. 

The consistent performance of a cloud-native environment can only happen if the data on which everything is dependent is adequately protected. Any data breaches can result in massive disruption to service. For example, a ransomware attack on Travelex disrupted the business for months, resulting in customers having no access to foreign currency and eventually drove the company into administration. In the move to integrate cloud-native technologies and modern software, practical considerations about resilience and data protection often are pushed aside. For the finance industry, with many regulations and policies, disregarding data protection should not happen. Inadequate data can spell disaster for the digital transformation plans for many fintechs. According to the Veeam Data Protection Trends Report 2022, about 90% of IT leaders within finance confessed to a protection gap between how much data they could lose after an outage and how often their data is stored.

With applications and data spread across physical, virtual and cloud environments, and given the sensitive nature of the financial information stored by fintech companies, infrastructure vulnerabilities and data breaches must be removed. The way IT supports our modern world has changed significantly. New cloud-native applications and microservices are reducing software development timeframes, enabling more innovation and focusing on meeting shifting customer demands. Implementing a data protection solution capable of working across these different environments is essential. With this, fintechs can ensure they can reactivate applications and protect their business and customers against cyber attacks.

As CFOs explore ways to tackle the impact of inflation on margins, self-service analytics will be essential in driving employee productivity, according to a Gartner report. 

In December 2021, Gartner surveyed 400 finance leaders and discovered that over 50% saw self-service data and analytics as an essential driver of employee productivity. At least one in four saw it as vital for increasing business speed and agility. Self-service data analytics refers to technology and processes that finance users leverage with minimal involvement from IT departments. 

Alex Bant, chief of research in Gartner Finance, explains that two out of three finance leaders have raised their prices in response to inflation. Finding ways to improve productivity and efficiency rather than passing on inflationary costs to customers can create a critical long-term competitive advantage.

Advanced data and analytics and AI technologies generating high value and where investment is forecast to rise to include self-service data analytics, automated machine learning, cloud analytics, big data analytics and predictive analytics. 

Predictive analytics predicts a series of outcomes overtime or the distribution of an outcome that could occur for a specific event, using techniques like driver-based forecasting, time-series forecasting and simulation. Predictive analytics is one of the most popular use cases for finance executives automating their forecasting processes.

Bant explains that over 90% of finance leaders have increased their digital ambitions for 2022, but the same proportion is concerned about whether this development can continue due to slower growth, higher rates and the added pressure on profitability. Investment into the digital area, even as growth declines with be vital in determining the successful businesses of the future.

Big data and predictive analytics are considered critical technologies for generating higher revenue through improving products or services. Machine Learning and cloud analytics were viewed as the best solutions to improve cost efficiency.

The upcoming Gartner CFO and Finance Executive Conference will provide insights on the issues facing CFOs on June the 6th. The conference will deliver actionable insights for CFOs and their teams to support them on their digital journey and understand what makes a team successful. The Gartner Finance practice supports finance leaders meet their top priorities and delivering on vital initiatives that spread across finance and generate business impact.

A hybrid multi-cloud approach is emerging as the preferred IT platform for implementing a business-focused strategy.

The priority of delivering a successful hybrid IT strategy is ensuring that it aligns with your business needs. This plan involves determining the most suitable on-premise systems and combining these with the most effective software-as-a-service (SaaS) applications available that meet the requirements of your organisation.

Adopting the best available SaaS technologies needn’t mean eliminating all non-cloud systems. Many businesses need these installed systems to support any plans for further innovation and digital transformation. Other challenging, resource-focused services may not be cloud-ready. These conditions require a hybrid approach, which enables cloud and non-cloud systems to work together so companies can operate various applications in non-cloud conditions while adopting cheaper and more efficient SaaS technology services.

Another vital consideration for creating the best hybrid multi-cloud strategy is ensuring the correct infrastructure model is applied when moving from legacy systems to a blend of SaaS-focused models.  

The costs associated with maintaining in-house systems must consider the operational costs of the buildings as well as the opportunity cost that comes with datacentre infrastructure. This is especially true when expanding a business or utilising new cloud technologies to accelerate transformation.

It’s important to take note of the possible inefficiencies that can occur with a data centre when factoring in these costs. Studies suggest that data centres can waste up to 90% of the energy used from the energy grid. Switching to a cloud-first datacentre model enables a business to take advantage of the economies of scale. It reduces a portion of that waste and can enable more efficient IT technology expenditures and allow for a quicker transition with the best available SaaS technologies.

Combining a hybrid IT strategy with a structured implementation plan allows infrastructure to be scaled, improves enterprise agility and enhances transformation by using a good mix of on-premise and SaaS technologies.

Innovative technologies have made financial processes more efficient, reduced the number of errors and transformed how customers view and interact with their money. In terms of product development, measuring customer habits can generate better decisions, and businesses can create structured plans based on real-time API metrics and data to respond effectively to any changes in the market.
With the integration of additional SaaS-based applications and other services by more financial businesses, the opportunity for risk continues to increase too. The importance of data quality and security will only rise in a world where cyber-attacks become more prevalent, and a lack of compliance can be significantly detrimental to an organisation. API technology provides opportunities to innovate in the financial industry, enabling organisations a competitive advantage.

Businesses today are established on data, while finance-related organisations are established on customer trust. If the security of a customer’s money or information is compromised, the trust with the business is lost. An organisation must have 100% security of the data used in developing and implementing an API tool that needs that data to function.

Open banking services have given customers greater control over their finances. People can move and manage their money with greater security from stricter regulations. Open banking platforms are accessible from many devices, making them a simple and popular option for many individuals. The customer experience has improved significantly through open banking and provided several benefits, such as more affordable payment options and smart banking services.

Finance businesses can provide customised products and customer service based on intelligent algorithms that can predict the needs and behaviours of their customers. Consequently, any transactional data quality is dependent on how this data is initially structured. With such a variety of data collected, this can become challenging for data cleansing. Data teams will spend more time applying potentially ‘faulty’ data for analysis. It’s likely that valuable information could be lost or not considered, resulting in the need for more efficient data preparation.

Utilising Real-Time Decision-Making

The instant message-based transaction generated from APIs benefits users at all levels. These systems generate quick, standardised information based on preselected details encoded into the API. This standard structure results in less uncertainty for individuals and a more efficient test design that enables professionals to explore data quality issues.

How Open Banking APIs influence data quality

Protecting outbound data

Poor data within the API will result in operational and transactional problems by impacting reporting quality, searches and analytics. Financial professionals or anyone in a customer-focused position may have to search for specific customer accounts and, in the process, find duplicated data for the same individual. Duplicated records in online financial systems can cause discrepancies and take up unnecessary space, resulting in time and costly implications for a business. In some cases, internal reports could be on incorrect data and potentially be damaging when making strategic decisions on products or other services based on inaccurate data.

API Security Considerations

Systems may be at higher risk of malfunctioning when poor data passes through an API. Quality checks must test against data structures and avoid any potential security breaches. While many cases of API security problems are unintentional, there are intentional cyber-attacks which can leave business systems inactive for long periods.

When APIs are exposed to external systems, it’s critical that security and data measures are in place and data professionals can manage all data types. Centralised services in the finance industry committed to data quality management must collaborate with the relevant regulatory and legislative groups to understand and manage these processes.

While defining the problem of data quality in open banking is relatively simple, the solution can be challenging and ignoring the issue can result in considerable problems for a business. The rapid development of technology has made it challenging for organisations to handle customer data. Technology is one of the least regulated markets, while finance and banking are the most heavily regulated industries, and data quality is critical to security.

Any customer data shared with third-party groups via an API will always pose a possible risk. If any of this information is inaccurate, the risk of exposure will rise further. Managing this risk involves having data quality solutions that ensure the customer data collected from open banking APIs are complete and correct.

Data quality assurance within finance must incorporate data governance measures and include a centre of data quality excellence. Establishing these frameworks and plans for data quality standards in open banking data ensures these problems can be solved.

How can finance leaders leverage analytics and cloud systems to improve their business functions?

Our workforce today is experiencing significant change. Technology and the rise of automotive products are transforming how processes are done and how senior leaders manage their business, particularly in the case of CFOs. In the last year, digital technology has accelerated the need for businesses to adapt their working models to remain flexible, smarter and efficient.

Businesses that enhance their focus on data and analytics to support their transformation are often considered more successful. Investing in these products, however, is only the beginning. There are several things financial leaders should consider to leverage the potential of analytics on the finance service.

Investing in cloud technology

Businesses are consumed in data but yet are still hungry for additional insights. The ability to utilise data insights can determine the success of a business, and while many leaders believe they are capable of leveraging data, studies suggest that those leading the way are experiencing a 7% higher revenue growth.

This process involves the following measures:

1. Real-time insights in data allow businesses to be proactive and explore what is happening through analysing trends and analytics.
2. Businesses will often interpret data in various ways. Cloud technology will allow finance leaders to measure data more flexibly and transparently. This will support overall decisions and ensure finance avoids any unnecessary or time-consuming efforts.
3. Being capable of benchmarking information is important for businesses to understand how they compare to others.

Businesses are looking towards the future and appreciate that investing in cloud and finance technology will ultimately benefit their organisation. For over 50% of businesses, the cloud has moved beyond an idea to a reality in terms of integrating cloud-focused HR tools. This represents a key force in transforming today’s workplace, enabling businesses to make smarter decisions. 

Create a clear plan

To enable growth, remain resilient and flexible, businesses need to ensure they have a clear strategy on how they can operate in the cloud. Consistent planning represents a key factor for exploring new growth options. An annual report is no longer sufficient. Applying tools like AI, ML and predictive analytics enable businesses to deploy reports and plans more effectively while reducing potential risk to their business.

Leverage the potential of collaborating data

Consolidating finance, HR and data in one place can create multiple benefits. It can lead to better outcomes while enabling each area to reach its own goals. Consolidating all information enables a business to think more holistically and ultimately make better decisions for the long term.

The success of a business will depend on whether your team has the necessary tools to be more efficient, flexible and operate securely. Being open and capable of collaborating are the new ways of working, and the cloud allows this in many ways. Not only will this lower time spent on manual tasks, but it also enables businesses to make real-time, data-driven plans to grow and attract the best talent.

Measuring results

For most, salary and benefits represent the biggest expense, meaning two major cost drivers are people related. Businesses often spend money on products and technology that fail to show ROI or direct benefits to employees. If employees aren’t satisfied, engagement will drop, and benefits to a company will be lost. This has become even more challenging as the pandemic has made it easier for people to move jobs.

With finance playing a critical part in business decisions, it must be capable of determining what data is needed and analysing it effectively to deliver the necessary actions. Measuring employee engagement and goals is one big step in talent retention.

Making the commitment

Cloud systems enable businesses to target specific talent and identify the skills and experience needed for the most vital roles. Not only will it improve finance functions, but it also enables HR teams to determine the best candidates, highlight potential engagement issues and identify what employees are looking for in a business.

Consolidating finance, HR and data in the cloud integrate valuable insights across your organisation, enabling teams a better understanding of their data, where there may be potential gaps and how to optimise particular areas to generate better and smarter results.

The Fintech industry has generated significant changes, disrupting many industries, particularly the financial sector. Fintech has created several benefits in finance, improving payments processing, insurance and money lending. The rise of fintech has provided a unique customer experience and enabled people to embrace the transition to fintech.

The majority of fintech customers tend to be choosing traditional financial institutions as there are several challenges that fintech needs to tackle to continue this technological revolution. Some of the main areas to focus on relating to trust, transparency, security and customer trends. 

Security and User Privacy

Across Europe, the use of financial technology increased by over 70% during 2020, supported by considerable investments into fintech. A rise like this comes with new challenges, one of which is developing new security concerns. Cybersecurity cases are rising, and unfortunately, fintech businesses are a prime target for cyberattacks. The fintech industry holds significant valuable information that needs to be protected.

Maintaining a grasp of new technology

According to a recent survey by Gartner, over 50% of financial services CIOs believe that most businesses will work with digital technology and that these channels will yield higher revenue and value. This statement emphasises the importance of fintech on the future of business performance.

Businesses that rely on traditional management systems will not keep the competitive edge needed to maintain momentum with the shift towards digital technologies. Many companies consider the transition to digital as a necessity rather than just being a good idea.

Emerging technologies such as cloud computing, AI, ML and big data offer several benefits for businesses looking to reduce overheads. They also provide the potential to improve the overall user experience. The move to these technologies, however, does come with initial costs and some risks.

AI provides a considerable competitive advantage by creating deeper insights into customer behaviours, enabling financial businesses to assign the right product to the right customer at the right time.

The Quality of Software

Finance businesses that apply the latest business technology create an advantage in the journey towards digital. The ability of new cloud technologies depends on flexibility and scalability. Having flexibility means cloud technology can enable systems to evolve alongside a business. Successful fintech businesses are dependent on reliable IT technology resources.

Industry Regulations

Regulatory compliance has become a challenge within the finance sector due mainly to the rise in regulatory fees attached to earnings and credit losses. There is a growing number of regulations that financial businesses must comply with, and compliance can present added pressures on resources.

The future of the fintech industry is relatively clear. Financial technology is going to have a significant influence on the finance industry. Developing a functional financial solution will require considering all of the challenges mentioned.

Businesses today are consumed by so much data, some face the challenge of accessing the information or lack the right tools to analyse their data.

The digital transformation of the finance industry has been happening for several years now. The potential to automate manual processes has enabled finance to transition from its conventional reporting processes to a more innovative forecasting and analytical model. While many businesses confirm they are applying analytics to their organisation in some shape or form, only 14% of finance businesses use large volumes of data available to generate valuable insights, according to the FSN Future of Analytics in Finance report.

Finance teams that have taken this approach to harness this information are better placed to forecast more accurately, create valuable scenarios and explore clear insights that support enhanced decision-making. The FSN report also suggested that 86% of analytics resources were not achieving the mark. The study believes that one of the main reasons for this is that many businesses are not utilising the value and insights from their data.

The survey found that ultimately it is the data that is holding many businesses back. Organisations are either overwhelmed by the sheer volume of data or are held back by the technology they are using to measure their information. According to the report, only 12% stated that they are suitably equipped to manage their data and have all the necessary resources to deliver clear, actionable insights.

The accelerated rise of new technologies available across the market has left many financial businesses struggling to maintain pace. This includes predictive analytics, artificial intelligence, machine learning, robotic process automation and more. While all of these technologies are valuable, creating success requires a holistic-based approach, and many still seem to be working towards this.

The survey indicated that over half of respondents were not capable of regularly adding new data sources to enhance business insights, and under half can make full use of non-financial data. When asked about the key features for analytical tools, many respondents placed AI and ML as top priorities, while at the bottom are some of the most important building blocks for creating an effective analytic system, including the ability to integrate multiple data sources.

The survey findings resonate with developments in the market. Many larger organisations struggle to deliver efficiency and agility in their reports, planning, budgeting and forecasting processes. This is often down to an over-reliance on spreadsheets and manual processes or using fragmented applications that a business may have outgrown or not capable of managing.

Innovative businesses are improving analytical insights by combining processes to deliver a singular system for financial results, budgets and forecasts. Businesses are taking further steps to integrate data processes into their analytics platforms on a more consistent basis. Accessing this type of information and combining it with financial data provides these businesses with clear views into key trends and indicators that enable decisions that can impact the future of a business.

Generating unified and efficient reporting combined with operational data requires the appropriate analytical systems and appropriately skilled talent. In our rapidly developing economy, having the necessary information systems capable of generating clear insights and analytics is not an option anymore but a vital part of surviving and succeeding for the future.

Oracle has expanded its relationship with the UK Government by enhancing the Government Centre of Excellence and enabling better access to Oracle Cloud. Oracle has updated its links with the Government by updating the existing Memorandum of Understanding (MOU) between Crown Commercial Service (CCS) and Oracle, as well as focusing on building a stronger working relationship between Oracle and the UK public sector. 

The Oracle Centre of Excellence will provide further support and technical capabilities enabling the UK Government to make more use of Oracle Cloud. The updated MOU will ensure governments and the public service sector will have continued use of Oracle Cloud. Critical services will have complete access to the full range of cloud applications, infrastructure services and autonomous technologies. 

Oracle Cloud will support customers like the UK Government in delivering higher efficiency, automation and productivity, all important factors in supporting a successful economic recovery. The services will provide public sector organisations with further support in shifting workloads to Oracle Cloud Infrastructure or expanding the use of the Oracle Cloud Applications Suite. 

Philip Orumwense, commercial director and chief technology officer of Crown Commercial Service explains that the enhanced MOU will continue to create savings and further benefits for public sector customers using Oracle’s cloud-based technologies. Orumwense highlights that the services will create more value while supporting public sector customers’ journey to the cloud. 

Gareth Rhys Williams, the Chief Commercial Officer explains that the UK is committed to the Build Back Better growth plan, a part of which involves ensuring we make the most effective use of modern cloud technologies. Extending the relationship with Oracle will enable the UK to continue generating commercial value, enhance services delivery and support the wider agenda of the Government. 

Richard Petley, MD and Senior Vice President of Technology and Cloud at Oracle explain that the announcement confirms the commitment and long-standing relationships between their business and the UK Government. Petley highlights that the collaboration enables the potential of the cloud to support the UK is leading the way in adopting digital technologies. 

Oracle provides the only multi-region cloud for use by public sector customers in the UK and can be used by multiple groups such as the Home Office, the NHS and the Ministry of Defence. The revised MOU builds on these relationships and will enable public sector group to use cloud technologies to deliver the most effective public services and greater value to the customer.

The importance of cybersecurity doesn’t just apply to the IT industry. It is a vital part of every business, particularly within the finance sector. Banks and other financial organisations hold and manage millions of transactions daily, with the majority of these payments being done by digital platforms. This rise in digital payment options has come with a rise in targeted cyberattacks.

Cybersecurity has been a critical factor in the financial industry and has become fundamental in establishing a level of trust and credibility with customers. The fundamental reason placing significance on cybersecurity for the finance industry is protecting customer resources. As more customers convert to cashless finance, banking activities are typically done via online platforms. In the case of a security breach, it damages the customer but has an additional impact on the business retrieving information and the implications of listing customer trust.

Despite further government efforts to prevent cyber-attacks, the vision of a world free of these security breaches is unlikely. According to BitDefender, ransomware attacks increased by over 700% worldwide in the first half of 2020. What is quite clear is that the pandemic has shown that businesses need to remain very conscious of their security. Applying a zero-trust approach towards security is essential for financial services that may experience the emerging threats from Covid-19.

Data is so valuable and represents the key to financial services. Applying this level of ‘distrust’ within security requires considerable detail about what your cyber-security is protecting and applying security controls close to your data. Those responsible and managing security should understand where all the data is stored, how it can be extracted and where it moves within the business.

Practical tips financial services can use to stay protected

Understanding what you have and where it goes is an important first step to implementing a zero-trust security plan. Beyond this knowledge is being capable of acting based on an accurate idea of your data.

Businesses should look beyond conventional approaches towards cybersecurity that aim at blocking systems. Instead, businesses must integrate a cyber-resilient approach that is automated and integrated into their working environment. Focusing on protection, detecting, responding and recovering cyber resilience must enable permanent business performance via the most efficient response and data recovery measures. 

Three key areas that contribute to effective cyber-security in financial services

Encryption has existed for some time but remains an important tool for sensitive information that is stored in multiple locations or moving around regularly. 

Location is an area that relies predominantly on your business understanding the location of your data and how it moves around. To keep data safe, several local and remote copies of critical files must be developed. This should be combined with systems capable of understanding the standard behaviour of data, so if a change in activity occurs, the response time can be immediate. Once security managers grasp this, they can determine the most appropriate method to classify data location and allow access correctly.

Access is generally focused on a transition to the mindset with data. For example the financial services industry as like many need to move away from giving employees access to all data just because they work at that particular business. Instead, data access should be prioritised as a privilege only granted to those when necessary. This is where the concept of zero-trust comes into play and security managers need to create a process of accepting data access based on several measures or personalising access based on the responsibility of each employee.

Security can become overwhelming especially with the rise of new data generated these days. It’s easy for many organisations to be playing catch up and not necessarily apply enough resources to this area. Financial services don’t have the strongest historical reputation in terms of data breaches but that doesn’t mean that a strong cyber-security model cannot be achieved. 

Remaining vigilant, consistent data management and implementing an action plan based on insights and a zero-trust approach are needed for effective security in finance.

Amazon’s AWS cloud business has announced the launch of a new data management and analytics service for the financial industry.

As with most industries, data represent the driving force behind financial services, for banks, insurance companies, hedge funds and many more. This data, whether it be structured or unstructured, is stored in a silo separate from other data. Being capable of aggregating and ordering this data can enable businesses to unlock new insights such as patterns with transactions, customer profiles and predicting future buyer trends.

Known as FinSpace, the new service will reduce the amount of time spent by the financial services industry, replacing traditional manual processes that are often complicated due to governance and compliance policies. The service includes an analytics system developed on Apache Spark, an open-source analytics engine dedicated to processing big data.

As with most AWS services, FinSpace is priced on a per-usage basis, including the amount of data stored, user numbers and the resources used to process the data. Amazon said Legal & General and Deloitte are some of the first businesses to use FinSpace.

With investment in cloud continuing to rise, it’s clear that big public cloud businesses need to specialise. A one size fits all approach won’t necessarily work to attract leading big business from on-premises to the cloud.

FitSpace fits into a larger trend that includes larger cloud businesses target markets with varied toolsets tailored to meet a specific market.