In an age of disruptive forces, the Covid-19 crisis has upended the world’s assumptions. But amid incalculable losses, there is also an opportunity — perhaps a responsibility — to explore how the pandemic might open new paths to a better future.
Consider cloud technology. One way the pandemic galvanized more benign ruptures with the past, such as telework and contactless payments, was to enshrine cloud computing as the critical enabler of enterprise, innovation and creative partnership in turbulent times.
The financial industry is no stranger to turbulence. And it played a vital role in providing ballast to life in the Covid storm. The pandemic also served as a wake-up call to financial industry (FI) players to remind them that only cloud solutions enable agility, resilience and collaborative innovation to thrive in the new normal of disruption.
“The financial industry is undergoing revolutionary change,” says Aater Suleman, vice-president, cloud transformation, at NTT DATA. “We’re dealing with unprecedented times. I haven’t visited a bank once in the past year. There’s little question that banks that don’t switch to cloud will be left behind.”
Financial services remain on legacy architecture at their peril. They need instant scalability to meet any changing demand, impregnable defenses to thwart more intrepid hackers, and zero-latency global connections, as well as protection from outages in a 24/7 banking environment. These are only possible in a cloud or hybrid-cloud environment.
With fintechs snapping at the heels of established players, cloud solutions give instant access to AI, the Internet of Things and other advanced tools that underpin the new cloud-driven paradigm of digital business platforms (DBPs), which Suleman calls “the crux of what currently drives the financial industry”.
In short, the cloud-enabled banking revolution opens up vast opportunities. An NTT report forecasts that the global digital banking market could be worth $1.2tn by 2025, with a compound annual growth rate (CAGR) of 14.96 percent.
The dangers of being left behind are real, and summed up by an International Institute of Finance paper that states: “Covid-19 has shown the limitations of legacy applications and infrastructure in their ability to support both the immediate shift to primarily digital engagement with consumers and the extraordinary volumes and volatility that are challenging global markets.”
Global banks understand the stakes, both in reward and risk. Nine out of 10 global businesses cited in an NTT financial industry white paper say “the time is now for transformational digital change — a fundamental change”. Nonetheless, most are locked into legacy technology: NTT’s research shows 77 percent to be in “early phases of planning to integrate digital capabilities into their core legacy systems”.
According to Suleman, one of the obstacles to FI cloud innovation is an “immune system” protecting against compliance risk in a highly regulated industry. “It’s been an industry where there’s more concern about what you may lose than gain by taking bold steps such as cloud transformation.”
But powerful solutions exist to turn the tide, with NTT offering innovation labs that partner with industry players to advance “fearless innovation” – bold yet safe cloud strategies whatever a bank’s stage in cloud adoption.
This approach is underpinned by NTT’s overall commitment to cloud innovation, including the launch of a new Cloud Communication Division to bolster its Intelligent Workplace Solutions. The new division offers everything from managed services across hybrid environments to custom-made cloud communications platforms.
“Whatever your vision, whatever your challenges,” says Suleman, “NTT innovation labs provide a sandboxed environment where we can partner with your teams to experiment, prototype freely, then safely deploy in the cloud.”
The NTT innovation labs leave a trail of success. For example, NTT partnered with one of Canada’s biggest insurers to develop an AI-driven platform that delivers quotes as fast as the fintechs, underwritten by a treasure trove of institutional data.
In other cases, NTT has enabled businesses to move away from their vertically integrated business models to a cloud-based DBP product ecosystem, promoting fintech partnerships with shared assets under a trusted brand umbrella.
“Our job is to create the open skies environment where you design the innovation platform,” says Suleman. “We liberate you to focus on your own innovation highway, so that you can launch services in minutes and hours, not days and weeks.”
NTT’s key takeaway from the year of Covid-19 has been how it starkly divided FI players into two camps: those already well into their cloud journey and those that have hardly begun.
“For businesses that made these investments, it becomes a question of doubling down and accelerating the vision,” says Suleman. “Since Covid gave ultimate proof-of-concept of cloud benefits, they’re finding it easier to unlock budgets and go faster.”
Industry players that faced Covid-19 without cloud resources “realize what they missed”, Suleman adds. The good news is that the cloud revolution enables real-time operational upgrades: “Cloud is particularly interesting in that it enables you to leapfrog.”
NTT believes it is in a unique position to empower the financial industry through world-class innovation expertise at every stage of the cloud transformation. Critically, NTT’s end-to-end cloud solutions are powered by one of the world’s most advanced networks of state-of-art data centers. They are also fully featured and highly scalable for fast-paced transformation.
Another crucial advantage is NTT’s extensive experience of working with the financial industry to deliver “a specific blueprint” for each challenge.
“Whether you’re looking to speed up or start from scratch, one thing you need is a partner who does multiple facets of the transformation,” says Suleman. “And you need a partner who understands your industry through battlefield experience. At NTT, we’ve been serving the financial industry for decades.”