The Three V’s of Digital Transformation for the Financial Service Industry
The COVID-19 pandemic required businesses, especially those in the financial services industry, to reevaluate their digital transformation strategy, find ways to optimize operational efficiencies, and better serve customers. In the inaugural session of the “Digital Transformation Storytelling Series,” Talend’s RVP Northeast, Jon Sunberg, and HVR’s CTO Mark Van de Wiel, and HVR’s RVP Sales East, Tom Tracy, discussed how companies in the financial services industry overcame common data challenges and how they’ve leveraged cloud technologies to create value, reduce costs, and improve their bottom line.
As a data replication company, HVR uses low-impact log-based Change Data Capture (CDC) to extract data in real-time from a variety of cloud-based and on-premise sources, such as Oracle, SQL Server, SAP HANA, Db2 for z/OS, and others, into Snowflake, AWS, and more.
Talend, a global leader in data integration and data integrity, enables companies to transform by accelerating the availability of trusted data. Talend Data Fabric offers a single suite of apps that shortens the time to trusted data by solving some of the most complex aspects of the data value chain.
HVR and Talend work together to help customers integrate data from various sources and targets for a complete view of operations and analytics.
What is Digital Transformation?
Before we dive into the common data challenges and solutions, we must define digital transformation. Digital Transformation occurs when businesses create new or modify existing processes, cultures, and customer experiences. It also happens when companies use information as an asset to develop new strategies to reimagine the business entirely.
Challenge #1 – Volume
The global pandemic leads to market volatility, which increases the volume of activity for organizations in the financial services industry. Financial organizations have to deal with increased transactions, operational activities, and regulatory requirements. For example, a post-trade clearing house saw a 16% increase in the amount of data they had to process. That’s over 2.15 quadrillion dollars of financial transactions.
According to several studies conducted by J.D. Power, “consumers value seamless digital experiences from their bank that provide instant access to their financial information.” With an influx of data, many financial companies are leveraging their cloud technologies to integrate public data with data they already have within their firewalls.
Asset managers and wealth management companies use this data to make more impactful and insightful decisions by combining their customer data with healthcare statistics, population changes, and weather patterns. As a result, customer satisfaction increases because the company has a deeper understanding of current situations and the need for ease of use and accessibility.
Challenge #2 – Velocity
Although companies are dealing with increasing volumes of data, service-level agreements (SLAs) remain the same. Database administrators manage tight turnarounds to meet SLAs so that decisions can be made quickly with as little risk as possible. For example, some banks are performing end-of-day capital and risk reports for regulatory purposes on-premise. To get everything accomplished, they would have to spend more money on hardware and labor to manage it.
We can’t forget about regular transactions like real-time trading, fraud detection, distributed ledgers, and all of the digital applications. Or the ability to quickly process and respond to loan applications or requests for lines of credit to other businesses.
There is a delicate balance for companies to analyze the most accurate data possible while making quick decisions to maintain a high level of customer service and competitive advantage.
Instead of added hardware and labor, companies move to the cloud or develop a hybrid cloud strategy. With cloud technologies, they can get rid of the burdens that come with additional hardware and have the flexibility to speed up market requests with the paradigm of growth and volume.
Challenge #3 – Veracity
Financial services companies are taking on more responsibility to ensure their data is accurate and secure. Companies are tailoring their offerings by stitching different applications and data together with other technologies to ensure the data is correct. Due to security concerns, companies are very hesitant to drop their data and their customers’ data in the cloud, therefore delaying cloud adoption.
Just because financial companies are securing their own environments, you can’t assume that they can do a better job than a cloud service vendor. It’s the cloud vendor’s core business function to ensure their customers’ data is secure. Whether it’s Azure or the Google Cloud Platform, there is a multitude of services available to manage data or integrate it with data management services. Many financial service companies are starting to view security as a commodity, and there are cloud providers that can secure data better than anyone.
Although companies in the financial services industry face many challenges during the COVID-19 pandemic, they remain invested in making better decisions using accurate data. If you have any questions or want to learn more about HVR and Talend’s capabilities for real-time data delivery, contact us at [email protected].
To learn more about how organizations are accelerating their digital transformation strategies by leveraging real-time data and cloud technologies, register for a Digital Transformation Storytelling session.