The Cloud Experience Everywhere
Cloud_Experts

How banks are building a vibrant future: 3 top strategies for digital innovation

Banks are turning to a range of new technologies to improve the customer experience and fend off competition from new players in the financial services marketplace. Join us at Sibos 2021 to learn more.

By Toine Timmermans, HPE Worldwide GreenLake FSI Incubation Manager

HPE-Pointnext-Services-Hybrid-Workplace-Financial Services-Industry.pngBanks today are operating in a highly dynamic economic and business environment, and the pressure is on to modernize their IT operations.

They face some significant challenges. Low interest rates, along with the significant impact of COVID-19 (which increased credit risks), are reducing core profitability. Banks are looking for ways to reduce costs and grow revenue to counter increasing competition from Fintech firms and digital giants (Bigtechs). That means improving their ability to innovate, which in turn calls for investment in technology enablements and upgrades and accelerating the shift to digital. However, many institutions find themselves hampered by legacy business systems.

At the same time, banks need to improve the customer experience and meet changing expectations around online services, especially among highly tech-savvy younger customers. In short, they need to reconnect with customers and rethink and digitize client experiences.

What do we see banks doing? Here are the top strategies:

1. Modernize the IT environment. Many organizations are adopting a cloud-first strategy. This involves creating a vibrant ecosystem of partners and revisiting third-party relationships, as well as reconsidering offshoring vs. on-shoring strategies. Key questions include: Should we build cloud-native applications in-house, or buy them from a vendor? Should we try to build partnerships with Fintech firms? Or – and this is perhaps the easier and safer option – should we partner with a technology vendor to build out a flexible environment?

HPE GreenLake edge-to-cloud platform is a good fit for the latter option. We’ve seen customers achieve significant performance, cost, and innovation benefits while maintaining control of their data, workloads and apps, and without the complexities of migrating to public cloud. (Learn about HPE GreenLake cloud services.)

For example, a big retail bank in the U.S. recently chose HPE GreenLake platform for important digital transformation projects that leveraged the Splunk data platform, which is designed to investigate, monitor, analyze and act on data at any scale. Read about the initiative in this ZDNet article.

Read more about Kubernetes PaaS for Splunk, delivered by HPE GreenLake platform on Intel architecture.

Another important priority is to embrace digital payments. Many institutions have some catching-up to do – in some cases, they’re facing ten years of e-commerce growth in just 90 days thanks to the impact of Covid 19! In fact, the International Air Transport Association reports that U.S. e-commerce penetration experienced 10 years’ growth in just three months in Q1 2020.1

Contactless payments are on the rise in the U.S. And there are other new requirements. The need for instant payments – electronic payments processed in real time – has never been more critical. In Europe, a European Payments Council mandate requires instant payments in the Single European Payments Area. This is the SEPA Instant Credit Transfer scheme. According to a 2021 report from the Council, 2,304 payment service providers have already joined the scheme; that’s 59% of European PSPs.2

Implementing new systems/processes such as instant payment applications involves significant work. To implement more quickly, consider the use of micro-services in combination with your own services. Delivering in the cloud allows faster implementation. However, you also need to consider how to retain control of your data and protect data confidentiality. In most cases, only part of your services catalog can run in the public cloud – most has to be on-premises or in a private cloud.

Payments and fraud detection applications will likely be at the top of your list of potential investments. You might want to consider HPE GreenLake for Core Payment Systems, which we offer in partnership with Lusis, and which we announced in June. See our press release about new HPE GreenLake cloud services.

This breakthrough offering, based on Lusis TANGO running on HPE’s fault-tolerant NonStop platform, supports instant payment transfer with underlying fraud detection. It also supports LitePOS, a VDI-like solution for retailers that removes the need to store data at the end-point, while connecting directly with the data center.

Read more about HPE NonStop for Lusis Tango.

2. Gain insights from a wide range of data, including financial transactions, risk, customer insights and behaviors, new products/innovations, trade and more.

Rising cybersecurity risks, high customer expectations, mobile banking, and the development of new competitive applications and technologies like blockchain have made it necessary for banks to innovate. Banks are experiencing exponential data growth, and they must find ways to leverage their data to create eff­iciencies and realize better outcomes, while maintaining high standards of security.

Deploying infrastructure that meets the changing needs of the business while continuing to meet compliance mandates can be challenging. With limited resources, skill sets, and budget, many organizations struggle to adapt to the demands of today’s dynamic workloads.

How are banks tackling these challenges? Many are exploring the capabilities of artificial intelligence to optimize, accelerate, and secure their operations. AI is the foundation for scalable, productive, and cost-eff­icient banking; it enables organizations to uncover intelligence from all their apps and data. Banks that invest in AI technologies have a major opportunity to streamline risk management, enhance customer experiences, and become truly data-driven.

Some of the most popular applications focus on security, regulatory compliance, fraud detection, know-your-customer (KYC) capabilities, and anti‑money laundering (AML). Tookitaki is an HPE partner with whom we provide solutions in the last category. Communications surveillance solutions may include natural language processing (NLP) and fraud detection for transactions, as well as functionality to reduce the number of false positives and integrate new regulations and compliance into existing processes.

Here’s an HPE GreenLake cloud service that you should definitely investigate for your AI and machine learning projects: HPE GreenLake for ML Ops. It’s an enterprise-grade cloud service for ML, fully managed for you on-premises.

3. Deliver a hybrid workplace. The pandemic changed the world of work, creating a ‘new normal’ of hybrid workplaces. Take, for example, the trading function. Before the COVID-19 outbreak, most traders were working in offices. VPN quickly emerged as an alternative, but VPN from home wasn’t instant or secure. Banks needed a solution that could work with data maintained in a central data center.

Virtual desktop infrastructure (VDI) fits the bill by providing customized remote access based on user type. Traders need secure, fast performing, desktop-as-a-service solutions to meet requirements like access to trading apps, instantly, without performance degradation, with all data centrally stored. Other power users or super-power users demand exceptional performance, too. VDI can deliver it, and it can also deliver the right level of functionality for core users in the front office and back office.

HPE GreenLake for VDI delivers a secure cloud experience that scales at speed, offers high performance, and is delivered and managed for you by HPE so you don’t need to develop new skill sets in-house.

HPE is at SIBOS 2021!

If you’re planning to catch the SIBOS all-digital event, October 11-14, you won’t want to miss this session, presented by Valerie Da Fonseca, HPE GreenLake Worldwide Sales and GTM Director, and myself:

Meet the Experts: 3 Ways Cloud is shaping the Future of FSI  – Fireside chat with Hewlett Packard Enterprise

October 10, 2021: 13:30 PM SGT time / 07:30 AM CET / 01:30 AM EST

Come explore with us 3 ways we’re helping financial services realize successful outcomes with the cloud that comes to you — wherever your apps and data live. To meet today’s customer expectations, build resiliency for the future, and compete in a fast-moving world, digital modernization is critical. To get there, you need solutions that optimize costs and efficiency, mitigate risk, and deliver faster insights while enhancing customer experiences. HPE GreenLake edge-to-cloud platform provides the IT infrastructure delivered with cloud-like speed and agility, allowing you to focus on your bottom line while innovating and delivering value to your customers.

Join us for this session: www.hpe.com/dmn/FSI

1. IATA E-Commerce Monitor, Dec. 2020: Covid-19 accelerates consumer behavior

2. European Payments Council, SEPA Instant Credit Transfer Today

Toine Timmermanns.jpgToine Timmermans is an HPE FSI GreenLake Incubation Manager working for the Worldwide GreenLake Portfolio team and is based in the Netherlands. He was part of the incubation team that developed the HPE GreenLake platform approximately 11 years ago. In his current role, Toine drives HPE GreenLake platform incubation projects for the financial services industry and leads the Deal Pursuit team in preparing and communicating the customer business case/proposal for emerging markets, existing markets, and specific deals.


Cloud Services Experts
Hewlett Packard Enterprise

twitter.com/HPE_GreenLake
linkedin.com/showcase/hpe-greenlake/
hpe.com/us/en/greenlake

 

 

0 Kudos
About the Author

Cloud_Experts

HPE experts share their insights on how you can transform your business with HPE GreenLake edge-to-cloud platform – the cloud that comes to you, wherever your apps and data live.