September 10, 2023
The BFSI sector has been expending considerable efforts to reinvent its operations, especially given the sweeping tide of digital models and changing consumer behaviours. Consumers today expect near-instant, personalised and seamless servicing across channels - online, mobile, and in-person.
Technological prowess drives these changes, fuelling financial institutions to embrace the Cloud. This is where the Financial Cloud comes into being. It renders better growth, speed, innovation, security, and compliance across all the operational facets - front, middle, and back office.
Major Issues Facing The BFSI Sector
Today’s data-driven, digital ecosystem renders unique growth opportunities in the financial sector. Note that the challenges to financial IT stand eternal. Apart from ensuring smooth and seamless operations, the CTOs in the BFSI sector also get charged with catering to IT issues like these.
A threat that is invariably ingrained into financial IT issues is data security or cybersecurity. However, most of this significance stems from the security landscape. Infiltrators continuously find new, innovative ways of penetrating systems, and new security technologies are always underway. Even in the absence of these threats, regulatory bodies contest security management. And any failure to comply can cause a downgrade in company ratings. Worse even, it subjects financial institutions to costly punitive action.
According to a report, 90% of financial services IT executives reveal vulnerability to data breaches. In this stead, maintaining and curating data security is no easy feat. Note that data security behests upon considerable investment in time and money. Despite the efforts, many stand vulnerable. Nonetheless, IT officers must be constantly aware of the latest threats and regularly assess security measures and protocols.
A type of data security that is incredibly concerning is Automated Clearing House or ACH fraud. It marks the transfer of unauthorised funds in a bank account. It is easy to execute! A fraudster only needs an account number and a bank routing number. This data breach begins with fraudsters installing a computer Trojan through a “phishing” attack.
Infrastructure And Expertise
This addresses a mindset problem. Even seasoned CTOs are seen maintaining a technology versus finance mindset. Unfortunately, this misconception has not yet departed from the BFSI sector. The reality is that both go hand-in-hand. Financial institutions heavily rely on security, and the financial services sector considerably lags in understanding the impact of technology. According to experts, only 57% of the largest 109 banking corporations comprise board members with professional technology backgrounds.
Now, this is a classic instance of organisational silos. Here, a Financial Cloud system can come to the rescue by eliminating the operational complexity through a single, resilient and high-performance platform. What lends such efficiency to the Cloud system is software-defined, hyper-converged architecture.
Another significant challenge that riddles the BFSI sector is regulatory compliance. The gamut of regulatory agencies stands to protect consumer interests. Hence, BFSI institutions must comply with government and industry regulations to conduct operations.
One Instance is the Dodd-Frank Wall Street Reform and Consumer Protection Act catering to transparency and stability in global banking. Another one is the Bank Secrecy Act and anti-money laundering regulations, requiring banks to comb through voluminous transactions to identify fraud and report instances. Manually reviewing such data requires considerable time, making it incredibly labour-intensive. Plus, automatic data collection and analytics make the process much easier. In reference to this, next up is the issue of big data.
The avenue of Big Data is both the bane and the boon. The most telling benefit for the BFSI sector is tapping into social media, consumer databases and newsfeeds. All these help gather crucial consumer data. The financial institutions can then leverage the data to target, retarget and remarket their offerings to clients, tending to personalised services.
However, many consumers are wary of companies making use of Big Data. Additionally, BFSI organisations can often find it daunting to sort through the voluminous information. Lastly, using Big Data requires considerable analytical prowess backed by technology and a dedicated specialist or team.
This is where a dedicated Financial Cloud helps by deciphering the vast data points and segmenting relevant and unimportant aspects. It does so through an ML-powered and adaptive infrastructure.
To Sum It Up
Given these issues and the dynamic world, the banking basics are evolving. Banking corporations must embrace innovation and ensure that their core infrastructures have a robust foundation for organic growth and enhanced customer care.
To this end, the Web Werks VMX Financial Cloud addresses all the aforementioned challenges. Web Werks VMX incorporates a homogeneous structure which combines computing, storage, virtualisation and networking. In doing so, it reduces the reliance on disparate serving systems and abandons silos through automated workload management across all mission-critical applications.
Another aspect is adaptability. Web Werks VMX equips the BFSI sector with agile Clouds. These cater to the high market volatility, enabling you to mobilise or freeze resources and digital assets with the click of a button. The enterprises can exercise complete control over the virtual environment. Enterprises can also seamlessly switch among the robust Cloud hardware-software configurations. The consolidated and intuitive control panel lends the BFSI sector the requisite resilience and efficiency for rendering hyper-personalised, cutting-edge services to their clientele.