Financial Operations or FinOps for short has emerged as a critical discipline for financial organizations undergoing digital transformation. As a silent architect, FinOps emerges not just as a discipline but as a guiding force, ensuring that the brilliance of innovation and technology doesn’t cast shadows on financial equilibrium.
As FinOps takes center stage, the global cloud FinOps market has ascended to a noteworthy $832.2 million this year, with projections indicating a staggering growth to $2,750.5 million by 2028. These numbers signify the increasing reliance on FinOps and its role in steering the financial industry through the complexities of the digital future.
In a conversation with Sudip Lahiri, Executive Vice President and Head of Europe, Financial Services at HCLTech, our Trends and Insights team delves into the essence of FinOps — its significance, the challenges it addresses and the transformative role of artificial intelligence (AI) in reshaping the financial services landscape.
Lahiri defines FinOps as "a critical discipline that delivers a much-needed structured framework, empowering financial organizations to flourish in the digital age.” It is a framework that focuses on cost efficiency, expenditure prediction and navigating the web of regulatory compliance. With organizations transitioning to the cloud, seeking optimization and enhanced financial strength, FinOps has silently become the unsung hero in this transformative journey.
Legacy integration and regulatory challenges
Navigating the intricacies of modernization often comes with hurdles — the integration of legacy infrastructure with modern cloud-based infrastructure. This transition creates a gap between traditional financial management methods and the demands of a digital era.
Lahiri identifies three pivotal challenges: the need for seamless integration, navigating complex regulatory landscapes and ensuring the quality and accuracy of data. He emphasizes that this integration is essential for improved reporting and a better comprehension of cost structures.
The financial services industry operates within a web of regulatory and compliance standards. Lahiri points out that while FinOps is a valuable tool in meeting these regulatory expectations, it does come with its own set of challenges. Financial institutions must adhere to strict security regulations, such as GDPR in Europe, and ensure data confidentiality and privacy, while having all mechanisms and mitigations for risks.
He further highlights: “KYC [Know Your Customer] and AML [Anti-Money Laundering] are a big topic in the industry today, hence, addressing these challenges necessitates the deployment of robust technology and processes. To navigate regulatory complexities effectively, organizations must invest in FinOps solutions that not only optimize their operations but also ensure compliance with legal requirements.”
The impact of AI on FinOps
Lahiri sees AI and its enabler, cloud, as a game changer in the financial services landscape. He believes that AI empowers organizations to attain more advanced capabilities in the realm of FinOps. “HCLTech has developed numerous AI use cases and is implementing proof of concepts for organizations in the FinOps space,” he added.
AI and cloud are transforming FinOps and the broader financial services industry by offering advanced analytics capabilities. These capabilities enable financial institutions to optimize processes, reduce costs and improve decision-making.
The recent HCLTech Cloud research echoes this sentiment, revealing a growing appetite for cloud investment. With 87% of financial service customers expressing a desire to invest more in the cloud, the future promises a seamless convergence of cloud-ready and cloud-enabled FinOps solutions. Lahiri’s vision encompasses “a future where cloud and AI will equip organizations with the capacity to tackle FinOps more effectively.” This trajectory promises enhanced capabilities and an ability to meet the evolving demands of the digital age.
The blend of cloud, AI and FinOps
As the financial industry advances toward cloud and AI-driven solutions, it stands on the brink of a future characterized by enhanced efficiency, cost control and innovation. The FinOps revolution not only reshapes financial services but propels them into a new era of digital transformation, where data, technology and agility reign supreme.
In a world where financial organizations are constantly challenged to adapt and thrive in the digital age, FinOps stands out as a testament to the resilience and adaptability of financial organizations. With the convergence of cloud technology and AI, financial organizations are poised to unlock new possibilities and create a brighter financial landscape for all.