Banking on context to unlock opportunity in financial services

The potential emergence from the Covid pandemic will require significant adjustment to challenging macro-economic conditions. In 2022, growth is unlikely to return to levels forecasted pre-pandemic. But the greatest challenge for financial services firms will be to maintain and enhance relationships with customers trying to adapt to their “new normal”.

A glimpse of this challenge is already apparent in the “great resignation”, which has created talent issues for firms that have been less able to accommodate the demands of employees looking to adjust. In turn, the disparity in outcomes for FSI firms who succeed or fail to flex to customer needs will likely never be greater.

Context is king

To address the challenge, firms must gain insight on the challenge. There’s a general appreciation that data is foundational to developing insight, but it is not enough. To exploit maximum insight from data, firms need to curate and exploit context.

Much in the same way that language can become ambiguous without punctuation (e.g., Eats, Shoots & Leaves), so too is data without the correct application of context. And with poor insights, poor decisions naturally ensue. For firms looking to successfully address their challenges in 2022, there are several immediate opportunities to enhance and use context across multiple areas.

Holistic enterprise architecture

Firms looking to adapt to changing customer requirements need to flex their operating model and develop new processes and ways of working – and quickly. For large organisations and even those on mature digital transformation journeys, fast, agile change is hugely challenging. An insufficiently holistic approach to enterprise architecture is often a root cause of organisational inertia.

The processes and the IT infrastructure which support organisations are inextricably linked. Businesses can’t implement strategic changes when they don’t understand their costs. And they can’t understand their costs if IT functions don’t understand the impact of those changes on the IT portfolio, and the costs of their ongoing support.

Siloed views of process and IT portfolio information prevent firms from realising the inherent context between them, and from optimising their outcomes. They must create and expose a common view of the IT portfolio in the context of the business processes it supports, and the business strategy those processes are supporting. By exploiting this additional context, agility and operational efficiencies can be significantly increased.

Holistic enterprise architecture can reduce planning effort for new transformations by up to 95% and ensure IT infrastructure development maintains alignment with business strategy. In addition, a contextualised view of the IT portfolio enables effective rationalisations to be quickly identified, driving down longer-term infrastructure costs. 

Enhanced decision making

Adapting to customer requirements will often require making new or improved decisions, which in turn requires astute analysis of firms’ data. Thanks in part to the “big data” paradigm, many firms have become adept at collecting very large volumes of data, but are significantly less adept at managing and using it. Fractured environments that build up over time obscure the existence of data, impeding the assessment of its quality, value and subsequent exploitation to drive innovation. Poor use of data typically undermines good customer experience or less trivially can add to systemic or regulatory risk.

Just like IT infrastructure, firms cannot manage data in isolation, but must understand it in the context of the firm’s objectives. In the context of data, the firm’s objectives are to understand “What is going on?”

The Data Fabric concept as described by Gartner may provide a powerful architecture agnostic approach which could quadruple the efficiency of data utilisation. Instead of treating the data estate as multiple single threads of data, Gartner advises firms recognise that these threads of data are interwoven and have context dependent inter-relationships.

Adopting a Data Fabric approach requires the creation of additional data stores to articulate the relationships between data, which are frequently updated. This creates an environment where the business can routinely pose questions, and information regarding how best to answer the question is baked into the infrastructure.

Application management

Service deployment is typically the last hurdle to providing more engaging customer experiences. For many firms, mature monolithic applications have historically been a delivery bottleneck. A switch to containerised microservice architectures has provided firms with greater potential to create more flexibility and agility.

However, there’s no such thing as a free lunch. These benefits have been achieved at the expense of the significant additional complexity of managing tens or possibly hundreds of microservice instances that comprise a modern microservices application. Slow development cycles have been exchanged for much bigger operational headaches.

Multiple technologies were created to ease the pain of managing containerised, microservice applications. Container orchestration tools such as Kubernetes manage the microservice lifecycle to automatically prune dead instances or scale instances in response to increased demand. Service meshes overlay these orchestration tools with mechanisms to simplify common functions such as service discovery, communication and security.

Amid the complexity of managing microservice instances it can be easy to lose track of what is important – the performance and behaviour of the overall application. An AppMesh provides an additional contextual layer on top of a service mesh to restore this application awareness. This approach enables application owners to gain visibility of usage and change the behaviour of applications via configuration rather than code, negating the need for unnecessary downtime or redeployment.

Finance, in context

Today’s competitive financial services sector sees large incumbents and nimbler start-ups competing for customers, and it is imperative that all firms optimise the way they manage their data and applications. By exploiting the context across IT portfolios, data and applications, more compelling user experiences can be created with greater agility and lower cost.