In any discussion of enterprise data centers, financial services come immediately to the fore. Globally and across the Asia-Pacific, they are the largest private enterprise sector both by footprint and investment.
Ahead of the release of DCD>Asia-Pacific | Edge to Cloud, Kapronasia's Research Director Josef Jelinek sat down with DCD's Nick Parfitt to discuss the changes he's seeing in the financial services sector in the region.
Kapronasia have researched and consulted to all sectors within the financial services industry in East and South East Asia over the past 15 years. Jelinek describes financial services as currently at “an inflection point” as demands on their business and IT systems from different sources place significant pressures on their IT infrastructure.
But the considerable sums invested by financial institutions into their own on-prem data centers may become a liability as that infrastructure becomes less able to keep up.
As Jelinek explains, “There are new competitors emerging, regulators continue to keep a very close eye on the financial sector and customers want everything accessible and tailored to them now. The pandemic has accelerated this. So, they can’t continue to be stand-alone institutions which do everything in-house - they need to become part of larger ecosystems at a time when interest margins are low and there are pressures to decrease their IT spend."
The process of opening out has not been simple or quick.
Jelinek identifies the drive to push everything into cloud, and then delivering services via apps that can be scaled up and down quickly, as one that may represent only part of the solution. The locations where financial data is housed and processed needs to be identifiable by regulators, customers and the institution itself. Issues of security, data sovereignty (and, in some use cases, latency) work against hosting that is invisible or movable.
Therefore, Jelinek concludes, financial institutions “needed something in the middle, a hybrid structure”. Variations on this hybrid IT model enable easier switching between multiple cloud providers while improving overall resilience and capability. In short, it enables financial institutions to achieve the goal of “agility.”
This may present a paradox. He notes, “You don’t usually use agile and data centers in the same sentence."
To make it work relies on the concept of modularity being applied not just to physical infrastructure, but also to more flexible contractual arrangements for external facilities and services.
Jelinek stresses the need for financial institutions to develop tech strategies based on how far they decide to operate on the basis of platform or infrastructure. An industry that has been considered "traditional" will need to adapt to fast-changing operating landscapes, increasing customer and legislative demands and the need to assign value rather than cost to IT infrastructure.
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Conference Session Edge Data Centers: demand, drivers and resiliency
To learn more from Josef Jelinek, tune into his new episode of DCD>Asia Pacific | Edge to Cloud entitled "How is the digital infrastructure behind financial institutions moving into a new era?"
Broadcasting at 12pm SGT (UTC+8) on 16 September, Josef will join fellow experts from Collard Maxwell Architects, Mahindra & Mahindra Financial Services, and Batlivala & Karani Securities India to discuss the evolving relationship between banks and digital infrastructure in Asia-Pacific.
To stream Josef's episode, subscribe to stream DCD>Asia-Pacific | Edge to Cloud using the form below: