IT infrastructure in the banking sector forms the bedrock of effective access, security and data control. When designed and deployed correctly, your IT infrastructure protects business operations and sensitive client data while providing a seamless digital user experience for customers and employees.
However, to maintain technological momentum, many firms in the financial industry have legacy platforms that require modernisation. In this article, we explore how the role of IT infrastructure in the banking and financial sector is changing. Discover how companies can benefit from transitioning to modern digital strategies in a world where new disruptive competitors and cloud-based applications are commonplace.
What is involved in banking IT infrastructure?
When we talk about IT infrastructure in the banking sector, we’re referring to the system of hardware, software, facilities, service and network components that support the delivery of all business systems and IT-enabled processes.
- The hardware consists of the computers, mobile phones and tablets used by employees as part of business operations
- The software is all banking applications used by employees and audiences
- The facilities are the bank’s office locations and everything closely associated with those physical environments
- The service parts are all the connections and accounts used to access sensitive data
- The network parts are all the APIs, external links and data exchange standards
What makes an effective IT infrastructure in the banking sector?
A banking IT infrastructure needs to be flexible, reliable and secure, allowing the business to deliver a unified customer experience, achieve its goals and gain a competitive edge in the market. If the IT infrastructure isn’t functioning correctly, a banking business can face connectivity, productivity and security issues.
To build and deploy an effective banking IT infrastructure, five specific elements need to be satisfied:
- Affordability
- Efficiency
- Dependability
- Standardisation
- Flexibility
In terms of affordability, moving away from a legacy IT infrastructure can cost you less in the long run than continuing to use traditional connectivity solutions. When evaluating your options, consider all the affordability factors, not just the initial cost of implementation, but also the long-term savings that each potential route could bring.
However, affordability is only a small component of the IT infrastructure decision-making process. You shouldn’t focus solely on cutting costs by a pre-determined amount. Instead, you need to step back and assess the amount of positive impact an effective IT infrastructure will make on operational efficiency. Much of this will be achieved through avoiding wasted time and effort, and allowing the core business functions to operate more effectively.
We already know that banking IT infrastructures can be complex systems. They underpin fast-paced business environments and support mission-critical processes, including transactional, compliance and relationship building elements. As a result, you need to be reliable and dependable, and the associated cybersecurity services need to be world-class.
Technology standardisation reduces complexity, as well as delivering cost savings through economies of scale, ease of integration, improved efficiency, and better IT support. When you focus on standardising your banking IT infrastructure, your aim is to work to a baseline of standards that fit your business strategy, security policies and goals. From there, you’ll be able to identify and select solutions that are of the right quality and consistency, as well as ensuring compatibility and interoperability with all your audiences.
With that intricate combination of hardware, software, facilities, service and network parts, flexibility is also a big consideration. Banking businesses are highly reliant on being able to anticipate and react to market changes, customer needs and compliance demands. As the landscape evolves, infrastructure flexibility and scalability will become a large part of the equation.
What strategies can improve banking IT infrastructure management?
When you’re looking for improvements, cloud migration is a major component of successful IT infrastructure management. That’s because investments in large-scale on-premise solutions lack the necessary levels of affordability, efficiency, dependability, standardisation and flexibility demanded by businesses today.
When you’re considering a migration strategy, take a step back and consider the bigger picture. Think about how the different components of your bank IT infrastructure need to operate as a whole.
There’s little point in shifting your peripheral services and systems into the cloud if the core operations are left running on legacy IT. Transitioning these non-critical elements won’t deliver the value that transformational thinking can bring. That doesn’t mean incremental changes should be avoided. However, your strategy has to identify the areas where the biggest gains can be made with the least long-term disruption.
Combine this with an audit of current application usage and likely future requirements, and you’ll be able to anticipate any potential obstacles during cloud migration, preventing delays and ensuring a smooth transition.
How is banking IT infrastructure evolving?
Changing customer expectations, emerging technologies, new business models and disruptive new entrants are all changing the course of the banking and financial sector. To stay competitive in this evolving environment, banks need to understand the fundamental changes that are taking place.
People and businesses expect far more from their bank than they did even five years ago. We’ve all become more digitally aware, and we expect our providers to reflect this in their offerings. As a result, banks are already putting strategies in place to help them perform at a level that will ensure their continued profitability and long-term survival.
The good news is that banks are hugely data-rich. The bad news is that a lot of the data is trapped in legacy systems and cannot be used to full advantage. However, as banking IT infrastructures begin to advance, the situation is changing. From automation and machine learning to big data and analytics, financial institutions are harnessing their IT infrastructures to successfully integrate the tools that keep them competitive and their customers happy. These include:
- Analytical platforms for personalised services
- Open banking APIs
- Blending online apps with in-store branches
- Leveraging online helplines
With the right banking IT infrastructure, banks can replicate the retailer approach to personalisation, creating experiences that build relationships and turn customers into brand advocates. By taking a big data approach, you’ll be able to understand behaviours and automate personalisation programmes that anticipate requirements and suggest actions. And you’ll be able to do it through the most appropriate channel, and at the right point in time.
As open banking APIs allow financial data and services to be shared with third parties, this also creates opportunities for a superior customer experience. However, to be able to leverage all that historical data requires a modern infrastructure that can interrogate statements and transaction records while ensuring the proper balance between data enrichment, compliance and personalisation.
Although the overwhelming majority of banking customers interact with their bank online, through PCs, smartphones and laptops, using websites, apps and virtual assistants, there needs to be a seamless connection between online, helpline, and in-person transactions. This is the omnichannel approach that is used by many other verticals, with retail leading the way. Despite the switch to digital banking, that omnichannel experience can be a key differentiator, and can only be realised by using the right IT infrastructure.
How can Neos Networks support banking IT infrastructure management?
A robust and responsive IT infrastructure is central to the future success of banking enterprises everywhere. It forms the foundations of the systems and procedures that allow a business to stay competitive. It also ensures they exploit every customer opportunity, adapt quickly to changes in the legislative landscape, and stave off attacks from industry disrupters.
At Neos Networks we work with banks and financial institutions to ensure their networks and connectivity match their strategic plans and keep up with the demands of their customers. In a sector where competition is fierce and digital-only banks are gaining ground, market players turn to us to help them deliver the best possible customer experience.
Our low latency, high capacity networks ensure private, fast and reliable connectivity at all times. When your customers demand round-the-clock service, they won’t tolerate anything less than excellence.
From our Ethernet service, which provides access to more than 34,000 kilometres across the UK, with access to over 550 exchanges, to our dark fibre service, which gives you the maximum level of control over your data, we have the perfect solution for your banking business. Plus, with our expertise in supporting Critical National Infrastructure you can be sure that we will deliver.
If you’re considering your next strategic step and assessing your IT infrastructure options, get in touch, and we’ll advise on the right route to achieve the best possible outcome for your business.
