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TLDR: Financial services companies looking to stay competitive and build innovative fintech products should focus on a cloud-native strategy. We help you think through how to optimize the power of cloud-based data storage and analytics, map or remap your cloud migration, and develop new fintech products — faster.
Here’s what we’ve already heard about the future of fintech and innovation trends in 2023: Biometrics authentication is here. Buy now, pay later may be slowing — or shifting. Data is king. Customers want more and more personalized financial offerings.
And here’s what we’ve also heard about this coming year: Inflation. Recession. Budgets may tighten, and companies may invest with increased discernment. Still, in spite of economic pressures, innovation in fintech and payments will continue — and may even prove essential to thriving in a competitive environment of recession.
In the next year, IT spending is expected to rise by 5.1%. Cloud investments are heading for the sky, with global spending on services expected to shoot up by 20%.1 Tightening market conditions will result in greater scrutiny and a lot of focus on return on investment.
So, how do you drive innovation, build new products, produce faster results, and do it all with less? We’ve been helping our clients do this by unlocking the power of cloud-native solutions.
Cloud-native outcomes at a glance
A cloud-native approach brings the flexibility and agility of cloud-based data storage and computing to application development and management, powering ripple effects of transformation across your business, including:
- Capitalizing on cost efficiencies of usage-based cloud computing, saving companies 27% or more on storage and computing.
- Cutting out the technical depth and maintenance costs involved with legacy systems and outdated infrastructure
- Unifying data and gaining insights from the data sources you already have
Cloud-native strategies may be a bold step forward for your organization, especially if you’re in the early stages of a migration process or legacy modernization. But financial services companies should commit to a vision for transformation to stay ahead of agile fintech startups — competitors whose flexible, customer-centric, and data-driven solutions are powered by the cloud.
It’s time to fly – not walk – to the cloud. Here’s how we help clients think through cloud-native product innovation, data migrations, and cloud optimization.
- 1. Accelerating fintech product development — born cloud-native
- 2. Case studies: business transformations with cloud-native
- 3. What it takes to successfully migrate to Snowflake and cloud infrastructure
- 4. Thinking through cloud migration strategies
- 5. Optimization following migration — grow your cloud blueprint and unlock value
- 6. Working with an innovation parter for cloud migration and rapid product development
Accelerating fintech product development — born cloud-native
Data is one of the most valuable assets any 21st-century company holds, and leveraging that data is central to product development — especially in the financial services industry. The industry-wide problem: much of that data is siloed and difficult to use.
With data in the cloud, companies can manage and analyze massive volumes of data and fully activate accelerated product development: a rapid approach to ideation, prototyping a minimum viable product (MVP), testing, and iterating that can reduce your time to market by months or more.
Rapid product development in the cloud is possible because cloud-based data storage and sharing enables:
- Seamless collaboration across internal teams and with external third parties – powering faster innovation and more secure data sharing
- Customer data all in one place, readily available across teams to share, query, and scale
- Near real-time business intelligence insights from cloud-based data analytics and machine learning capabilities
- Faster time to market for new products and on-the-fly product adjustments
- Ease, flexibility, and scaling through greater data storage and computing capacity
But none of this is new. What is new is the crucial imperative to make strategic investments amidst the increasing pressure of disruptive innovation — and to stay competitive, companies must make the move to go all in.
The use cases for cloud-based data warehousing and analytics are just about infinite: from instant payments to buy now, pay later to digital experiences for credit card users. And these are just the financial trends we’re thinking about in 2023. That means a reservoir of data-driven product potential yet to be tapped.
And in the cloud, your product development cycle can move faster than ever.
Case studies: business transformations with cloud-native
From fintech startups to challenger banks embracing new visions for technology, financial services companies are launching innovative products and capturing the business value of cloud-native.
- Instant credit platform, PaywithRing, is seeing data insights for business intelligence within minutes, not weeks, and creating machine learning models within days, not months. With a real-time product insights dashboard, they’re making product changes on the fly.4
- After Capital One moved to the cloud, the company grew its data storage by 250x, reduced the costs of querying data by 43%, and significantly expanded access to data insights across teams – powering the launch of new revenue streams with software products like Capital One’s Slingshot.5
- Prontomás, a payments gateway developed by our team on cloud architecture, is solving cross-border payments challenges in LATAM. Merchants can now seamlessly analyze data from over 30 billion annual transactions made in-person and online via API or POS.
- Australian bank NAB moved 70% of its applications to the cloud, powering faster product and service development. After completing the migration, NAB released a fully-automated lending platform, QuickBiz Loan, which enables small businesses to access up to $250k in loans in under 20 minutes.6
What it takes to successfully migrate to Snowflake and cloud infrastructure
So, what’s holding companies back from making the move? And what can they do to ease the transition?
Upfront investment cost
For banks and traditional financial services providers, moving data and workloads to a cloud infrastructure can take years. They may need to build new cloud teams internally — data engineers, product management talent, and app developers — all of which can mean significant capital upfront.
>> Plan your business strategy accordingly, capturing cost efficiencies on the other side of your migration process. Leverage partnerships to delegate innovation requirements as necessary.
Lack of documentation and knowledge
Companies often face limited talent to maintain or document legacy mainframes and applications – making the transition to new cloud infrastructure all the more challenging.
>> Start the process now to ensure that you have the key talent available to successfully migrate from old to new architectures.
Governance and regulation to manage a data explosion
Following a migration, companies may be seeing exponential growth in data. And storing and computing data in the cloud comes with a use-based cost – not a yearly license.
>> Have a plan to streamline data management – from usage to security. Develop controls and tools to govern data analytics to contain these costs.
Mindset and planning
Migration is increasingly a business imperative, not only an IT challenge. While financial institutions may be experimenting with cloud migration, it’s crucial to demonstrate results through those experiments – and then move forward with a plan for large-scale adoption.
>> Focus on your most critical applications and infrastructure. Adopt a tailored migration strategy for each core technology as best fits your business goals.
Other industry-specific challenges
Companies both within and outside of financial services are looking to innovate their digital financial ecosystems through cloud-native applications and infrastructure – and these organizations face unique considerations.
Banks are rapidly migrating many systems to the cloud, but migrating mainframe data and still-functional applications is a taller order. The regulatory environment in banking still poses big hurdles, and it may take time for regulators to shift along with the industry’s move toward the cloud.
>> In the meantime, banks can prioritize a cloud-native strategy for the most crucial applications and products, such as payments. For legacy architecture innovation, work with fintech leaders with deep industry experience to strategize security and regulatory concerns.
By pairing insurance data with machine learning and artificial intelligence, insurers could optimize actuarial models, assess risk, and better prevent fraud, among a host of high-value digital transformations. But many insurers are moving incrementally to the cloud, and core insurance industry platforms are slowly delivering cloud capabilities.
>> For now, insurers can get more value from their existing applications as platforms modernize and make a long-game plan to invest in bigger cloud-native initiatives – especially for data security and risk assessment.
Outages in legacy systems can mean flight delays and cancellations, and data breaches can expose customer data and tarnish brand trust. While airline companies are starting to shift some financial applications and customer-facing products to the cloud, the industry faces a host of challenges and opportunities in cloudifying its core systems and operations.
>> Companies in aviation should prioritize backend modernization alongside the customer experience. Begin cloud migration for the highest-priority systems, such as crew operations that require real-time data.
Thinking through cloud migration strategies
Migrating to the cloud doesn’t have to mean going all in at once with a bang. And it also shouldn’t be a simple lift, shift, and hope for the best. Whether your company is just starting to map a cloud-native strategy or you’ve already built half of the house, think through your options.
Q: What should I leave on-premises, and what should I move to the cloud? What approaches can I take to making the shift?
A: Take the path that’s best for your business. Depending on your goals, core products and services, and existing infrastructure and technology, consider:
- Hybrid migration
- Phased migrations or all-in intensive moves
- Single and multi-cloud migration solutions
- Modernizing legacy systems through re-platforming, refactoring, and a range of other modernization approaches
Q: How do I prioritize my legacy modernization needs?
A: Identify your core systems and applications. Then:
- Prioritize migration for critical systems that are most at risk, non-operational, or written in out-of-date code.
- De-prioritize or eliminate applications or workloads that remain operational or no longer deliver business value.
At Blankfactor, we can help you think through these questions and dozens more that can be hard to see from the outset. And we offer solutions that can transform your products, services, and business for the long term.
Optimization following migration — grow your cloud-native blueprint and unlock value
Companies may have begun some form of cloud migration journey, but most financial services providers still have plenty of work to do to go all in.
If you’re incrementally moving to the cloud for the most cloud-ready applications and workloads, you may not yet plan to migrate legacy systems and mainframe applications.
Plus, many companies have yet to realize the full potential of moving their applications and data to the cloud. They may not yet have clear strategies or systems to execute on the insights, cost savings, and digital innovation possible. That means they could significantly overspend on cloud migrations in the process.
Take the Snowflake’s Financial Services Data Cloud. One of the most powerful, flexible, and secure data cloud environments available, companies can use Snowflake’s features to unlock endless possibilities to drive innovation following a migration.
Resource optimization >> cost and compute efficiencies
Legacy databases offer limited flexibility, but Snowflake’s data cloud brings highly-elastic data storage, computing, and scaling.
Automate querying and workloads with features like auto-suspend, auto-resume, and workload timeouts — leaving you with near-instant business intelligence insights and control over compute spending.
Secure data sharing >> innovation and product development
In the Financial Services Data Cloud, banks and other financial institutions can easily collaborate — all while protecting sensitive customer data through advanced encryption algorithms.
Companies can access integrations to supplement their resources with third-party data, accelerating product development.
Near-instant business intelligence insights >> innovation and product development
Leverage near-real-time data refreshes in Snowflake. Launch, test, and optimize new and existing products and services on an ongoing basis, enabling faster business intelligence, faster time to market, and faster ROI through new revenue streams.
Remapping your cloud migration strategy
So, even if you have a cloud migration strategy in place, you may now need to go back and remap by:
- Addressing more than the most cloud-feasible migrations
- Expanding your migration roadmap to include core infrastructure, including mainframe data and applications
- Digging into the most powerful features and capabilities in the cloud
Working with an innovation partner for cloud-native strategy and rapid product development
It’s no secret: There’s a lot on the line when it comes to cloud migrations. Innovation comes with risk for any business — especially in financial services, where security, compliance, and technology performance is crucial.
But with Blankfactor, you can have an innovation partner with knowledge of legacy systems and cloud infrastructure native to financial services.
We ensure that all the details of your strategy and tech are in place to support your goals — from the front end (UX/UI development) to the back end (data warehousing, data science models, and beyond).
As leaders in fintech product development, we can give you the support you need to:
- Develop infrastructure for complex products, from payment gateway apps to embedded finance products
- Guide you through the cloud migration process, helping you navigate the complex transition from old legacy systems to new infrastructure and applications
- Maximize your business value as you migrate and strategize for cloud optimization
- Navigate financial services technology trends, use cases, and capitalize on opportunities that make sense for your business strategy and target market
- Maintain your existing systems while we handle the migration process
Plus, we help you navigate all aspects of a fully accelerated product-development approach, including:
And we can be there to guide you through your stages of product launch, testing, and growth. As Snowflake partners, we know how to ensure your migration to this ecosystem is painless, fully optimized, and sets you up for long-term success.
Ready to get solutions for your cloud migration and fintech products?
At Blankfactor, we were born in fintech. We help financial services leaders make the most of their migration, develop innovative products, and maximize their investment. And we do it fast.
Letting the risks, questions, and unknowns hold you back? Contact our team today for a 60-minute solution session.
Featured image by Freepik