April 24, 2024
In the first and second parts of this series, we outlined the challenges faced by modern banking and financial institutions as they adapt and adopt the cloud. In the second, we talked about the cloud cost conundrum, and how customers have to consider cloud adoptions costs versus the speed of innovation.
Part 3: The Right Partner can make all the Difference
Banks and financial institutions looking to optimize their cloud environments should seek partners with expertise in managing cloud infrastructures, particularly those who can provide agility — quickly adapting to market and customer needs changes.
Hitachi Digital Services believes that success for financial services providers will come from partners that can show agility, optimized cloud spend, innovation and personalization. If I were to attempt to explain that in mathematical terms, it would be:
Success is a function of several highly interdepdnent factors and functions,and involves solving for all of them, which including a balance of speed of adoption, costs, innovation through precise engineering, and customizable personalization.
We at Hitachi have long been at the forefront of innovation, and have been working with our customers during and beyond their cloud transformation. Our investments have market relevance and are driven by factors such as:
We are helping our customers in Integrated Cloud Economics (ICE) scenarios that start from defining and tracking unit costs and identification of unit cost KPIs. We also include the implications of integrating external services, such as monitoring tools, data pull/push services, effective usage of cloud-native services, application architecture and their cost implications, and the interaction between app & cloud services. We also factor in the cost of data storage and data movement, cost-conscious application code and understanding resource dependencies – all of which are needed for providing comprehensive FinOps-optimized cloud management services.
To effectively manage the cost of the cloud, we are helping our customers understand cloud usage and cost optimization, performance tracking & benchmarking, cloud rate optimization and organizational alignment on effective cloud usage. With our FinOps offerings, we are also helping our customers in real-time decision-making , forecasting capabilities, ephemerality and waste reduction.
Application Reliability as a Service
The complexity of modern cloud workloads requires financial service providers to implement an equally modern operating model for managing cloud application reliability, security, compliance and cost. Our Hitachi Application Reliability Centers (HARC) offer best-in-class ease-of-use frameworks, technologies, automation tools and people to design, build and run financial service providers’ most demanding applications. This offering includes delivering Site Reliability-as-a-Service and 24/7 cloud management, creating a First Time Right (FTR) application ecosystem with a deep defense mechanism across different layers at the cloud, cluster, container and code levels. These Application Reliability Centers help our customers manage their workloads in the cloud more efficiently, with more simplicity, and transparency.
HARC delivers a customer-centric operating model with its underpinning in Site Reliability Engineering (SRE) and focuses on providing successful delivery and maintenance of reliable products. In our Application Reliability Centers , we are helping our customers achieve 360-degree observability and provide centralized and simplified monitoring through dashboards, health checks, improved governance and automated remediation through better incidence handling by identifying and routing them to the DRI (Direct Responsible Individual). Learn more about our application reliability services here.
Don’t Just Take our Word for it
Last year, Forrester interviewed four of our customers to determine the cost savings and benefits they experienced with cloud application migration, modernization and ongoing management services. Based on these interviews and financial analysis, Forrester found that over three years, a composite organization:
Other benefits customers reported were increased application quality, fewer application failures, more efficient application release processes, and improved compliance and governance management.
More Details on this Forrester study can be found here.
Case Studies
Here are a few examples of where we are helping our customers in their long-term transformation initiatives.
As a part of their long-term Cloud First strategy, one of our banking customers has created a marketplace of APIs that is focused on the internal modernization of platforms used by the bank’s employees. Over the last fifteen years, this central European bank’s network across central Europe has evolved, with each network institution developing distinct walled apps across functions and regions. The bank was looking for a long-term strategy to concentrate on a smaller range of apps running in centralized locations (including the cloud) and sharing a single version of the data throughout the organization.
The engagement started with assessing the technical and functional components throughout the network banks’ portfolio to determine acceptable candidates for standardization, which all banks can adopt through a common PaaS layer. A Discovery phase of analyses was completed to understand their current IT ecosystem better. An Omni-Channel API architecture was created to build an IT blueprint for the industry. Our team analyzed the existing situation of one network bank and its integration with the entire group IT.
Later, an API-based cloud-native platform was created, emphasizing an Omni-Channel design. Hitachi provided advice on data security best practices and compliance. Then, a comprehensive and resilient integration architecture was created that can be replicated across several network banks. Hitachi then leveraged our proprietary Hitachi Cloud Acceleration Platform (HCAP) as a one-stop solution for an end-to-end (assessment to big-bang migration) cloud acceleration journey and modern engineering footprint, with pre-built enablers and solution accelerators to achieve around 40% acceleration to code modernization and deployment through automation.
We are enabling several benefits for our customers in our continuing business transformation program. Some of these include reduced operating expenses, consistent customer experience across all network banks, scalability in consumer acquisition and expansion into other markets. This has resulted in improved time-to-market for new products and seamless transformation for the financial services provider. Please refer to the link below for more details on the transformation story.
The Unexpected Success: Innovation Through Standardization | Blog
Another customer, a regional bank in the US, was in the midst of a significant multi-year digital transformation program, with three key objectives: launching new products, enhancing the customer experience, and expanding their customer base while also promoting additional products to existing customers. Hitachi Digital Services is helping the bank improve the customer experience by creating a cloud-based digital onboarding platform with required integrations to third-party solutions. This includes self-service to opening deposit accounts, automating due diligence checks and Know Your Customer (KYC) approval.
We are also helping them monetize data through customer insights and improving customer experience, upsell and cross-sell opportunities. We are modernizing their data ecosystem from legacy to AWS/Snowflake for customer analytics, business analytics and compliance. We are working on many parallel initiatives that include architecture and operations management of end-to-end retail banking application and providing SRE platform engineering services, including provisioning of cloud services, managing and improving observability, remediating security findings, setting up monitoring and alerting, supporting the end-to-end sales process leveraging Salesforce, and building and supporting their marketing tech platforms. We have setup CoEs for the bank in critical functions such as data and quality assurance to drive transformation and we are delivering a broad spectrum of solutions including advisory, architecture, software development, analytics, cloud and engineering.
What will the future be like? Nobody knows for sure – but we have a really good idea.
Amid evolving macroeconomic conditions, banks and other financial institutions face significant pressure to exercise caution when allocating discretionary funds. They must focus their investments exclusively on programs that not only offer a promising return on investment (ROI) but also demonstrate potential for future business growth. Financial services providers will need to strike a balance between optimizing their cloud expenditures and fostering innovation. Programs centered around cloud technology must continually demonstrate their returns in the face of evolving economic and technological advancements that are impacting the global landscape.
Banks and financial institutions are exploring new ways of customer acquisition, streamlined post-sales services and user-centric simplified banking through OpenAI interventions. The financial services industry is gearing up for a fresh wave of customer experience management, financial crime detection, fraud prevention, risk management and compliance, among other developments. Much progress has already been made, and even more exciting developments lie ahead.
For more information on how Hitachi Digital Services can help financial institutions like yours make a seamless transition to better cloud performance and economics, contact us or visit www.HitachiDS.com today.
