Senior Technical Fellow (former CIO) of Broadridge Financial Solutions. Bridging the gap between security/technology and sales.
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Technology is creating endless opportunities for companies, especially financial service providers, to roll out new solutions and enhance the client experience. However, keeping up with the pace of innovation has become a core strategic challenge for many traditional banks and financial service firms.
To meet the challenge of delivering continuous innovation to customers, financial service providers and other companies must first look inward. Today, companies in all industries have access to powerful tools like data analytics, robotic process automation (RPA), and artificial intelligence. These technologies help them transform the way they create value and service customers. However, these solutions can only be used effectively by organizations that have designed and built an internal technology infrastructure capable of integrating and supporting them.
Reimagining The Internal Tech Infrastructure
For that reason, within financial service firms, technical enterprise architecture has been elevated from a relatively limited IT planning process to a core strategic function. Going forward, the design of an organization’s internal technology infrastructure will play a key role in determining its ability to develop new products, get solutions into the hands of clients and satisfy the demands of customers.
Given those stakes, financial service providers are investing huge amounts of time and resources in modernizing their IT infrastructure. As they do so, they should consider the following five design principles for their future-state technology architecture.
1. Create an API ecosystem that integrates microservices. The IT infrastructure of the future will be flexible, modular, and customizable. It will consist of independent and self-contained “micro-services” connected by open standard interfaces published in a services catalog. When designing or upgrading IT architecture, one of the most fundamental principles is to standardize APIs as the basic building tool that seamlessly integrates stand-alone applications and functions to expand and create a flexible overall solution.
2. Deploy a cloud-first and serverless environment. The connected microservices and independent applications that make up the future-state IT architecture will most likely not reside on on-premises hardware. Maintaining these services on one’s own private infrastructure would be costly, time-consuming, and unnecessarily complex. Not only will well-architected, public cloud hosting save money and free-up employees, but it will also give the organization access to a range of cloud-native capabilities—all at an optimal cost. Once the basic cloud infrastructure is established all new builds should be fully automated and orchestrated. Organizations should start refactoring existing functions to the cloud wherever and whenever possible (based on a valid business case), using serverless or containerization as appropriate to deploy the new cloud-based applications faster and more securely.
3. Build a rock-solid data foundation. One of the most important steps any organization can take in building a future-state IT architecture is eliminating redundant data stores from monolithic applications and consolidating data in an enterprise-accessible data management platform. That’s especially true for financial service organizations, whose legacy technology platforms are often the end result of past mergers that left data dispersed across poorly integrated systems. The enterprise data management platform should impose sound data governance, enforce data quality and ensure timely data availability—all while rationalizing storage requirements. When in place, a properly designed data management platform will also provide the foundation for a standard orchestration layer that allows monitoring and auditing and facilitates seamless business service integration across the organization.
4. Design for the future. Automation, analytics, and AI are transforming business, but we’re still in the early stages of change. There are infinite ways organizations can apply these tools to create efficiencies and enhance strategies. For that reason, it’s imperative that organizations design platforms and solutions that can be easily extended through the seamless integration of AI, machine learning, and RPA. Part of that design will include building capabilities that capture user events, compile them into datasets and leverage them for advanced reporting and analytics.
5. Focus on the client experience first. Across industries, digital tools continuously enhance the client experience, raising the bar for providers of financial services and other products. The overriding maxim for future-state IT architecture is to design with the client experience in mind. All IT design decisions—from the smallest and most tactical to the largest and most strategic—should include two critical questions: Will this change make it easier for our customers to do business with us? And will this change enhance or detract from the overall customer experience?
When designing (almost anything) for the future, it is critically important to architect and implements a rock-solid and extensible foundation that will support the required business solutions for many years to come. While the guidelines discussed above are critical to a successful architecture today, ensuring the platform infrastructure is flexible and pliable to pivot as new solutions come to market is also critically important.
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