The COVID-19 pandemic is a catastrophe that’s going to have a wide and long-lasting impact on the global economy. The coronavirus outbreak is causing widespread concern for every industry and the banking, financial services, and insurance industry (BFSI industry) is no different.
The BFSI sector will play a critical role in stabilizing the economy and ensuring business continuity. To translate the business growth and resiliency against digital transformation disruption, the financial vertical needs to improve operational flexibility and rethink priorities with more agile and efficient capabilities.
Technologies like microservices, API, containerization, cloud computing, AI, and blockchain will play a crucial role in the digital transformation strategy of banking and financial services customers, allowing us to connect through multiple electronic and digital platforms and deliver the optimal combination of services.
The impact of COVID-19- Taking a toll on the BFSI sector
According to IDC, “growth in global IT spending is expected to reduce by 3-4% by the end of 2020, considering the ‘pessimistic scenario’ due to the outbreak of the coronavirus disease (COVID-19) pandemic.”
Banking and financial enterprises have started shifting their business focus toward digital transformation acceleration and this has enabled them to revisit their operating model activities, emphasize on cybersecurity, buyout legacy assets, shared services carve-outs, and even signing up long-term integrated technologies and managed services support engagements that are centered around specific business outcomes and a robust digital transformation strategy.
Shifting focus to the modernization of legacy systems will become prominent
Is the BFSI sector prepared to combat this pandemic? The Response
- In response to COVID-19, designing and executing customer assistance programs should be the top priority for BFSI firms.
- Hybrid cloud will play a critical role, as the banking and financial sector has a significant emphasis on digital enablement to fuel their long-term growth.
- Shifting focus to the modernization of legacy systems will become prominent.
- BFSI firms would have to reconsider their products, positioning, and channeling approaches to meet the needs of mature customers.
- The BFSI institutions need to be mindful of different kinds of attacks and fraud, particularly when more workers operate from home and thereby open new vectors of threats.
- Digital transformation would be selective and not off the table.
Financial Services Industry set up for Cloud Computing under COVID-19
COVID-19 is changing the way how people interact and do business on a day-to-day basis in the digital age. The technological advancements are continuing to influence the future of banking around the world. As banks embark on their digital journey, they are investing in areas such as AI, hybrid cloud, blockchain, containers, microservices-based architectures, and open banking/APIs, which will continue to drive growth in the BFSI market.
According to IDC, “public cloud is playing a critical role in the bank's modernization efforts. More than 40% of APEJ FSIs already run workloads and IT jobs, either in part or in full, in a multitenant public cloud. Additionally, close to 30% of the banks that are currently running workloads in the private cloud now plan to move a percentage of these to the public cloud – with some having firm plans to move within ‘24 months’”.
For many financial services organizations, the hybrid multi-cloud approach is now a global standard. With the high demand for cloud-based application development tools and data analytics increasing dramatically in the area, leading FSIs are striving to bring new technologies to the market and exploit the capabilities of artificial intelligence (AI), machine learning, and internet of things (IoT) technology. The market growth can be attributed to the increased usage of SaaS solutions as enterprises need to support remote workforce.
How HCLTech Hybrid Cloud solutions can enable banks achieve digital transformation?
HCLTech has been a digital transformation partner for its customers through its hybrid cloud adoption journey.
HCLTech’s hybrid cloud solutions have been designed and orchestrated in a way to provide agility, flexibility, and faster time to market for application and services, hence, enabling better customer engagement.
During times of crisis, business continuity and disaster recovery plans are the most important priorities to look over. HCLTech hybrid cloud solutions can assist banking and financial customers through scenarios such as workflow automation, pay-as-you-use managed DR-as-a-service, faster GTM with demand uncertainty management, validated and tested blueprints that can help accelerate migration to cloud. It brings a stream of successful experiences of executing complex transformation programs including greenfield DC builds, migration to new data centers, and cloud service providers, using various levers of image-based migrations and data storage migrations, new builds, and platform transformation.
Diverse Portfolio of Offerings to Ensure Business Continuity
Hybrid cloud services have a diverse portfolio of offerings like velocity, infonomics, edgelity, containerizIT, adaptive data center, U4X, etc., that can help banking and financial enterprises to bring a stream of successful experiences. To maintain business continuity in situations similar to COVID-19, the solutions offered by hybrid cloud services can be utilized to derive business value directly from emerging technologies.
It can act as a robust accelerator and framework to help banking and financial enterprises deploy SDI with seamless hybrid cloud adoption, provide effective data and storage management, and a fully managed services construct for faster provisioning to deliver real IT transformation by offering rapid pace of application development and standardization as well as modern edge capabilities, among others.
In a nutshell, the banking and financial enterprise can leverage the benefits of on-demand scalable infrastructure services , effective data and storage management, SDI-enabled private cloud infrastructure in pay-per-use models, AI-driven cloud management and agile operations solutions that embrace their cloud adoption journey.
COVID 19: Business benefits that can be leveraged by banking and financial customers by adopting cloud
Financial customers can embrace agile and customer-centric transformation by migrating core platforms to the cloud to improve customer experience. Stated below are few benefits that are provided by cloud:
Banks do not have to care about the technical parameters of the IT infrastructure as cloud computing uses the delivery model of on-demand and pay-as-you-go resulting in low cost and high returns.
Accelerate IT Agility
Ease of use, manageability, and rapid deployment can greatly accelerate the deployment and expansion management of the banking IT applications.
Data Processing Capability
Enhancing the bank's data processing ability will help banking and finance business data to be stored, analyzed, processed, and mined in a short period.
Enhance the digital transformation journey for BFSI customers to facilitate the maximum possibility of integration of new technologies and applications in the future which maximizes the productivity of their operations.
Ensuring business continuity by managing the technology, so that banking firms can have higher levels of fault tolerance, data protection, and disaster recovery by offering high level of back-up and redundancy at a lower cost.
The Strategy of Going Forward in Times of Change
The BFSI sector is likely to step away from conventional ways to adopting cutting-edge banking technology and pave the trail of digital transformation. By putting the customer at the core of their business strategy, banking and financial institutions can still find a way to add some stability to their businesses.
Going forward we could see the BFSI segment adopting more agile ways of working
To counter the effect of pandemic like situations, the banking and financial institutions are implementing suitable emerging technology enablers that include:
- Monitoring and analytics systems to identify and plan for emerging challenges
- Artificial intelligence-backed tools
- Ensuring digital banking services through automation capabilities
- Digital banking platforms
There should be a constant review of policies, practices, and controls updating the business continuity and disaster recovery plans and encouraging customers to use digital and other virtual channels wherever required.
And finally, the BFSI segment should draw on the lessons from the COVID-19 pandemic and use them to embrace their digital transformation, while building a much higher degree of both operational and financial construct.
It’s NOW or Never to GO DIGITAL!