Across the Nordics, tech legacy means that a well-designed hybrid cloud is the next logical step for the financial services industry and its transformation journey.
The financial services industry in Finland is at the cusp of a significant change. Global industry leaders are well into the era of cloud industrialization, and established players in all markets are following suit.
"In Finland, the main driver behind the transformation is the willingness of enterprises to react to marketplace changes fast," says Sudip Lahiri, Executive Vice President and Head – Europe, Financial Services at HCLTech. "Go-to-market agility will secure an institution's competitive edge in highly competitive industries. It would be handy if there was a one-size-fits-all approach to financial services cloud strategy. Unfortunately, there isn't."
The Finnish financial sector recognizes its driver role in the economy as a significant investor, business financier, and lender for households. In the wake of the pandemic, the war in Ukraine and current turmoil in global politics, the industry has advised the Finnish governments to go easy on introducing future regulation and taxation reforms. Banks have called for support in maintaining momentum in returning to solid economic growth and employment.
"Financial institutions have their hands full in complying with requirements, and the rigid nature of the regulative context makes it hard for them to roll out innovation," says Gustav Bucht, Nordic Director Financial Services at HCLTech. "Many banks run legacy tech infrastructure that doesn't allow for nimble moves. Turnaround times increase, business suffers, and so does, consequently, the national economy."
"We talk with the leading financial enterprises in the Nordics and keep hearing the same story. Cloud-based infrastructure helps to react to marketplace changes in an instant. That's why it is on everybody's agenda right now."
Embracing cloud for innovation and resiliency
One of the crucial benefits of the cloud is its cost management and optimization. Cloud is a great way to switch corporate IT investment to a “pay-as-you-go” model and reduce capital expenses.
“Another part of the equation is better data leverage,” Lahiri says. “Most banks today rely on poor quality data that is often redundant and not very useful. It’s not clean, which leads to inferior analysis quality or extra time and effort in cleaning and shaping the data. Banks want data ready for analysis at the flick of a switch, and that’s where a solid cloud strategy comes into the picture.”
Banks are still running a considerable technology investment deficit, which is slowing down progress and innovation. In moving to a hybrid or multi-cloud infrastructure, it is crucial to start designing future-ready workloads. Distribution needs to be planned to lead towards a legacy infrastructure sunset – or at least legacy operability at a minimum cost.
This year has also seen an explosion of global cyber incidents, and cybersecurity is a primary concern for banks. With established cloud technologies, organizations gain the ability to manage risks at scale. Correct implementation of security controls and adherence to security protocols will help to mitigate cyber threats.
The talent challenge
“We are also seeing a tech talent challenge in the Nordics,” Bucht says. “The pool of people skilled in cloud and cybersecurity is limited. Firms face challenges balancing hiring, training and reskilling their people.”
HCLTech brings together talent, engineering, tech ecosystem, and solutions designed for business outcomes in its cloud operations. The CloudSMART offering brings together the entire value chain of hyper scalers, engineering, security and compliance, assessment, migration and modernization, operations, and finance, with the aim of helping enterprises accelerate their cloud business transformation journeys.
HCLTech is an experienced partner in this space and Gartner has awarded the IT transformation partner aa Top 3 position in Public Cloud, with the highest number of references.
Implementing the right cloud strategy
The right cloud strategy depends on circumstances. Some organizations prefer a hybrid architecture combining the cloud with their on-premises data centers, while others jump entirely to the cloud. For most financial businesses and banks, the latter is an unrealistic option.
HCLTech offers three top-level vantage points for intelligent management of the financial services cloud.
"First, let's remember that cloud transformation is a journey, not a destination," explains Lahiri. "Like any other stream of technological evolution, it's an ongoing process. Anchoring hopes to a final stage in this process is often a misleading exercise. Each adoption is unique based on the journey that the organization wants to undertake.
“Second, ecosystem thinking prevails. Enterprises will benefit from thinking beyond their walls. Given the vast scope of processes that can be achieved with cloud, one must have an overarching outlook in cloud migration, and an array of carefully selected partners will come with great benefits.”
The final tip goes back to innovation.
"We should reach a mindset of continuous modernization," Bucht adds. "We believe that for many Finnish financial services enterprises, the near future is in a hybrid cloud architecture. As skillsets develop, the role of cloud will be even larger. For now, hitting the sweet spot between cloud and legacy tech is the secure way forward."
"As a trailblazer of global digitalization, Finland is in a good position leading the way in overall cloud migration,” Lahiri says. "The business benefits in the financial sector innovation are obvious.”
"We are happy to help on the journey with our worldwide ecosystem of cutting-edge cloud expertise."