Joerg Schmuecker

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Forrester Study: How IT Decision Makers Are Using Next-Generation Data Platforms

Data is critical to every financial institution; it is recognized as a core asset to drive customer growth and innovation. As the need to leverage data efficiently increases, however, the legacy technology that still underpins many organizations is not built to support today’s requirements. Not only is this infrastructure costly and complex, it doesn’t support the diversity of workloads and functions that modern applications require. To overcome these challenges, organizations are increasingly adopting an integrated data platform that offers a seamless developer experience, runs anywhere, and scales to meet growing business needs. To better understand how such data platforms are being used, MongoDB commissioned Forrester Consulting to survey global IT decision makers at financial services and fintech organizations. In this article, we’ll share findings from the survey to help answer questions such as: What impact are legacy technologies having on financial services? What are the requirements for a data platform? And, for those already adopting next-generation data platforms, what benefits are they experiencing? According to the survey, the majority of decision makers are aware of issues related to legacy technologies: 57% of respondents said that their legacy technology was too expensive and doesn’t fulfill the requirements of modern applications. 50% said legacy technology cannot support the volume, variety, and velocity of transactional data. 47% noted that their systems landscape struggled to handle the rate of change required to stay up to date with customer expectations. Download the full study: What’s Driving Next-Generation Data Platform Adoption in Financial Services What is a next-generation data platform? Within the context of this study, a next-generation data platform is defined as supporting flexible and versatile data models, offering multiple access patterns (e.g., document, relational, graph), and catering to the speed, scale, performance, integration, and security needs of small or large organizations for new development or modernization efforts. All of these features are included in a single platform that delivers real-time, consistent, and trusted data to support a business. Adoption of next-generation data platforms in the financial services and fintech space is already high, with nearly 90% of respondents saying they are already adopting. The benefits are already understood, with 74% of respondents acknowledging not only that there are technology benefits but also that a next-generation data platform frees up teams to focus on innovation and enables faster software builds and iterating at scale (76%). The key to innovation - What's driving the adoption of next-gen data platforms? Security and risk management are key use cases Given the huge amount of confidential client and customer data that the financial services industry deals with on a daily basis — and the strict regulations — security must be of highest priority. The perceived value of this data also makes financial services organizations a primary target for data breaches. Many organizations are still working to realize the full potential of adopting next-generation data platforms; however, it’s understood that such platforms are the only way to manage cost, maximize security, and continue to innovate. Fraud protection (51%), risk management (46%) and anti-money laundering (46%) are high priorities for any new data platform, according to respondents. And, these findings directly correlate with 40% of respondents saying that their current database is unable to meet security requirements. Multi-cloud is driving investment Regardless of their size and business mix, most financial institutions have come to understand the benefits of cloud and multi-cloud services. Multi-cloud — the practice of leveraging cloud services from more than one provider — is no longer just a nice-to-have option. Regulators, however, are increasingly focused on cloud concentration risk as so much of the technology underpinning global financial services relies on so few large cloud services providers. Regulators have so far offered financial institutions warnings and guidance rather than enacting new regulations, although they are increasingly focused on ensuring that the industry is considering plans. An outage or cyberattack at a large public cloud provider, they worry, could derail the global financial system. Decision makers are finding that multiple clouds provide them with lower costs, higher performance, and greater flexibility. This is why, according to the survey, the top driver for investment for decision makers when adopting next-generation data platforms is multi/hybrid cloud capabilities (49%), followed by scalability (44%). Improving real-time analytics capabilities The ability to perform real-time analytics is key for financial institutions, as they need to provide more personalized customer experiences, react more quickly to market trends, and detect and prevent potential threats. With legacy systems, few of these organizations can respond to changes in data minute by minute or second by second. Among survey respondents, real-time analytics was the top feature (54%) that organizations are interested in with regard to next-generation data platforms. With improved analytics capabilities, businesses can analyze any data in place and deliver insights in real time. Legacy infrastructure is holding organizations back To remain competitive and build experiences that retain customers, financial institutions need to master their data estate. Specifically, they need to free themselves from the rigid data architectures associated with legacy mainframes and monolithic enterprise banking applications. Only then can developers build high-quality customer-facing applications rather than maintain legacy systems. High costs and data complexity are the top challenges driving organizations to modernize legacy workloads and unlock business agility. According to 57% of IT decision-makers questioned, legacy technology is too expensive and does not fulfill the requirements of modern applications. This correlates with 79% of respondents seeking a data platform that will address multiple workloads — ranging from transactional to analytical — as data continues to expand. What is the impact? Financial organizations use next-generation data platforms to replace legacy technologies that fragment and duplicate data and cause internal silos. This change also addresses key needs like reducing costs, lowering complexity, better onboarding for customers, and meeting security requirements. Once in place, a next-generation data platform provides several advantages, including minimizing data inconsistencies (43%), expanding geographical coverage (42%), freeing up resources (40%), and reducing time-to-market for new ideas (37%). Other advantages include eliminating the impact of database downtime for upgrades, migrations, and schema changes. And, additional benefits can be seen within the customer and employee experience, as they engage with and access information. Based on these benefits, financial services organizations are looking to increase investment in next-generation data platforms by an average of one million dollars or more in the next one to three years. The volume and variety of data that financial services companies must deal with will only increase in the coming years. As such, figuring out how to leverage, protect, and innovate around that data will put organizations in good stead moving forward. A next-generation data platform can be the key to making this happen. About the study MongoDB commissioned Forrester Consulting to conduct a study questioning global IT decision makers at financial services and fintech organizations to evaluate the impact they are experiencing when adopting next-generation data platforms. The study evaluates the benefits, challenges, and barriers of adoption that decision makers are experiencing, as well as the outcomes after adoption. To create this study, Forrester Consulting supplemented this research with custom survey questions asked of database/data platform strategy decision-makers in finserv (73%) or fintech (27%) from North America (22%), Europe (39%), and APAC (39%). The organizations questioned had 1,000+ employees. The custom survey began and was completed in September 2022. Download the full study — What’s Driving Next-Generation Data Platform Adoption in Financial Services — to learn about organizations’ needs and plans for using next-generation data platforms.

December 13, 2022

Hybrid Cloud: Flexible Architecture for the Future of Financial Services

Financial services companies are reimagining how they apply technology to meet the growing service demands of a digital-first world. As they recognize the operational and competitive advantages of the public cloud, many companies are migrating their computing needs to it as quickly as possible. For an industry with tight regulations, a vast amount of private data, and complex legacy infrastructure, however, moving every workload to the cloud isn’t feasible just yet. Instead, some companies are moving to hybrid cloud, an architecture that enables them to use the public cloud wherever possible, while keeping those applications and data with tricky legal or reputational exposure on in-house systems. In this article, we’ll examine advantages of a hybrid cloud approach and outline steps to consider when preparing for such a shift. Overview Hybrid cloud integrates public cloud and on-premises infrastructure into a single functioning unit. Through the public cloud, institutions gain valuable versatility, agility, and scale to run applications more efficiently and to turbo-charge experimentation. They can use existing infrastructure to handle sensitive workloads — including those storing Personally Identifiable Information (PII) — within a familiar, time-tested environment. Deciding where to host applications is usually a function of a workload’s data secrecy and sovereignty requirements and an institution’s assessment of risks and opportunities related to them. Developing the technical flexibility to move between public and private infrastructures makes it easier to match those requirements to the environment best suited to fulfill them. Advantages to hybrid cloud A hybrid cloud approach offers many advantages. For example, institutions can use public cloud infrastructure for tasks with dynamic resource requirements, such as payments processing over holidays or risk calculations for end-of-month reporting. This setup can reduce the delays, data center overhead, and sunk costs associated with adding in-house servers, some of which may ultimately be used situationally or not at all. Companies also save on capital expenses and improve responsiveness to internal and external demands. A hybrid cloud setup can also help organizations address compliance, resilience, and performance needs. Those operating in multiple countries can use in-house and public cloud resources across different regions to satisfy disparate requirements around data sovereignty and residency. This geographic and infrastructure diversity can also enhance a company’s failover and disaster recovery profile. By co-locating applications in public cloud regions near customers, institutions can also improve service performance — an important factor as the industry moves toward mobile-first solutions. As institutions pursue more efficient ways to work, the insight gained through planning and executing a hybrid cloud strategy can help inform and transform an organization’s operations. Institutions can begin the shift to the continuous cadence of DevOps, DevSecOps, and MLOps teams by incorporating public cloud tools and methods. This approach includes using process automation and orchestration tools to streamline delivery and maintenance, and management applications to free up in-house IT resources from undifferentiated work. The following section describes other ways a hybrid approach can encourage changes to institutional conventions. Rethinking budgeting Although fixed infrastructure costs and investments can limit an organization’s flexibility, most companies still budget for fixed costs and may find the usage-based billing of public cloud services unnerving. Making the shift from the transparency and stability of capital expenses for on-premises infrastructure to the unpredictability of operating expenses in public-cloud procurement requires an organizational adjustment. Vendors do offer cost-management tools to help budget for and accommodate these changes. Hybrid cloud can help ease this transition as the organization moves into an infrastructure-as-a-service model. Expanding a security mindset The financial services sector is a high-target industry for cyberattacks. Data loss and leakage are also significant concerns. Organizations, therefore, often struggle to transfer any control over security and system integrity to a third party, and disparate regulations increase those hurdles. Sometimes, though, organizations overestimate the effectiveness of their in-house security teams and underestimate the security capabilities of the largest cloud providers who, like banks, are charged with deflecting the most sophisticated attacks all day, every day. Cloud services providers and other third-party vendors invest heavily in security research and resources. They regularly certify to the highest compliance standards. They’re also constantly developing new solutions to help institutions bridge gaps in their homegrown security measures and team capabilities. The result is that the security capabilities of the public cloud providers are often more advanced than those of in-house teams. Simplifying infrastructure complexity The largest financial institutions with the greatest global coverage face the biggest challenges in building a hybrid architecture. What’s more, sunk investments in on-premises infrastructure can make it cost- and ROI-prohibitive to shift workloads to the public cloud. An architecture that can support a hybrid of public cloud, on-premises cloud, and bare-metal deployments offers a flexible solution to address this complexity. Click to read Finance, Multi-Cloud, and The Elimination of Cloud Concentration Risk Preparing for the shift As with any big shift in technology, the move to hybrid presents a set of challenges that are as much cultural and operational as they are technical. Preparation for a hybrid cloud project, therefore, must include organizational readiness assessments across functions. It must take into consideration not just the technical, business, and monetary impact but also the legacy mindset and organizational rituals that can jeopardize the best-laid technology strategies. In pursuing a hybrid cloud strategy, institutions can begin to modernize outdated operating principles as they transform their approach to technology. Given the high uptake within the industry, the steps to adopt a public cloud-only model are well-documented. In a hybrid cloud approach, however, lack of expertise in integrating public and private cloud technologies is a frequent challenge. This, coupled with staff who may be reluctant to adopt unfamiliar technology, can create resistance among technology teams. Early successes with high management attention can create excitement; for a wider adoption, strong central platform support through the infrastructure team, as well as training and transparency, can help staff get on board. Other effective ways for an organization to prepare for a hybrid cloud future include setting clear business and technical goals, creating inventories of data and applications, and evaluating how customers might react to changes in responsiveness and security brought about by the switch to hybrid. Assessing in-house skills and managing transformation anxiety of existing technical staff are also crucial to team preparedness. The following steps can help financial institutions prepare for a hybrid approach. Know your company and your customer Set goals: Companies that articulate clear goals for their hybrid strategy are more likely to achieve them. These goals might include gains in operating efficiency, more flexible development, cost savings, speed of innovation, IT resiliency, or regulatory flexibility. Evaluate your customer profiles: Retail and institutional customers require different services and protections from their financial institutions. An understanding of these needs and concerns should inform any analysis of the potential for a hybrid cloud implementation. The storage of PII, for example, demands special consideration. Profile your assets: Financial institutions house data and applications that perform business functions. Understanding these in a regulatory context, from a commercial perspective and through a technical lens, will influence decisions about how best to optimize them in a hybrid cloud environment. Blend private and public cloud: To decrease effort, organizations should reduce differences between the two deployment methods. This aim is crucial for a successful adoption. Initiatives that require teams to manually request assets on the private cloud usually fail. Build your team Engage stakeholders: An effective hybrid cloud strategy engages functions across the enterprise. It incorporates business, legal, IT, and security priorities into a comprehensive plan. Engaging compliance officers and security professionals early on is critical, as compliance and system safeguards must be woven into the DNA of any hybrid cloud plan from the outset.. Assess skills and educate the team: At the start of a journey to hybrid cloud, organizations often lack the expertise and mindset to confidently shift to a new model. Simply understanding the myriad services offered by public cloud providers can be daunting. Combining public and private clouds in a hybrid setup requires another whole level of up-skilling. Evaluating in-house teams to determine education and training needs is essential for the new paradigm. Foster transparency: In any effective cloud strategy, transparency across the organization is crucial to gaining buy-in, just as education is crucial to building skills. A cloud adoption team can ensure that the training and cultural needs of the organization are met alongside financial, customer, and business imperatives. Engaging your cloud provider(s) in this process can help. Map your migration Start small: Small proofs of concept build confidence and allow teams to expand incrementally on the back of those successes.. Manage risk: Start with a low-risk approach. For example, organizations may choose to move workloads that are highly dynamic and less sensitive first. These might include some customer-facing apps that contain little PII. Institutions often start with retail applications, while still running their institutional-focused applications within their on-premises data centers. This approach may change over time as they become more comfortable with public cloud security and managing a hybrid environment. Moving to hybrid Financial services institutions are already adapting to greater demands for innovation and efficiency by designing responsive IT environments and taking advantage of the public cloud — and often, hybrid cloud is a crucial part of that pathway. A hybrid cloud strategy is a great solution to help organizations to meet their technical and business objectives more cost-efficiently and effectively than with either a public or private cloud alone. A hybrid cloud approach offers the flexibility that institutions need to meet rapidly changing customer demands as well as competition from a new wave of challengers. As best practices become clear and more implementation lessons emerge, the industry will further embrace hybrid cloud as an important step in an evolution to a fully managed multi-cloud solution. Finding the right partners, of course, is crucial. Experienced teams and the best technical solutions greatly increase the odds of executing a successful hybrid strategy. The team at MongoDB offers solutions and advice to help financial institutions progress toward a more functional, flexible, and future-forward enterprise technology platform. To learn more about how MongoDB can help you on your cloud adoption journey, check out the following resources: Finance, Multi-Cloud, and The Elimination of Cloud Concentration Risk How Financial Services Achieve A Strategic Advantage With Data-Driven Disruption The Road to Smart Banking The 5-Step Guide to Mainframe Modernization for Banks

November 3, 2022

The 5-Step Guide to Mainframe Modernization for Banks

Enriched, convenient, and personalized are the watchwords for any business building a modern, digital customer experience. It’s no different for traditional retail banks, especially as they try to fend off challenger banks and design their own online banking and in-branch experiences to win new business and retain existing customers. But in order to beat the competition and build experiences that best those offered by neobanks, established retail banks need to master their data estate. Specifically, they need to free themselves from the rigid data architectures associated with legacy mainframes and monolithic enterprise banking applications. Only then can established banks have their developers get to work building high-quality customer-facing applications rather than managing thousands of SQL tables, scrambling to rework schema, or maintaining creaky legacy systems. The first step on this journey is modernizing the mainframe. Enriched modernization in 5 phases The best way to modernize is through a phased model that uses an operational data layer (ODL). An ODL acts as a bridge between a bank’s existing systems and its new ones. Using an ODL allows for an iterative approach, allowing banks to see progress toward modernization at each step along the way while still protecting existing assets and business-critical operations. Banks can see rapid improvements in a relatively short amount of time while preserving the legacy components for as long as they’re needed to keep the business running. MongoDB’s five-phase approach to modernization enables banks to modernize iteratively while balancing performance and risk. If banks are eager to modernize and their customers are demanding modern banking experiences, what’s taking banks so long to move away from the legacy systems that are restricting their ability to innovate? And why do so many legacy modernization efforts fall short? Download The 5 Phases of Banking Modernization to start plotting your path forward. Mainframe modernization techniques With an ODL, the legacy infrastructure can be switched off piece by piece and retired as more functionality is added. In this scenario, database operations become much more efficient because objects get stored together rather than in disjointed locations. Reads are executed in parallel via the nodes in a replica set. Writes are largely unaffected. To bring similar benefits to writes, banks may choose to implement an ODL with sharding and regional shards , bringing writes closer to the actual user. Workloads can then be gradually moved from legacy systems to the ODL, with the ultimate goal to decommission the legacy system. The beauty of this approach to modernization is that it starts with the use case: What problems does the bank face in its data management and what functionalities are customers requesting? If the first priority is giving customers access to historical transaction data, then banks can tackle that problem immediately by building a repository (or domain) to offload customer data from the mainframe. If the priority is cost reduction, then an ODL can act as an interim layer, allowing applications to access the data they need without the need to run expensive queries against mainframe data. The advantages of an ODL MongoDB is ideal for connecting legacy mainframes and databases to newer architectures, such as a data mesh, by way of an ODL. An ODL has a number of advantages. Combined, these advantages make data massively easier to access and use — and applications easier and faster to build. An ODL allows an organization to process and augment data that resides in separate silos, and then use that data to power a downstream product, such as a website or an ATM. With an ODL, data is physically copied to a new location. A bank’s legacy systems remain in place, but new applications can access data through the ODL rather than interacting directly with legacy systems. An ODL can draw data from one or many source systems and power one or many consuming applications, unifying data from multiple systems into a single real-time platform. An ODL relieves the mainframe of workloads. One useful by-product is in avoiding consumer service interruptions brought about by maintenance windows on legacy systems, like Oracle Exadata. An ODL can be used to serve only reads, accept writes that are then written back to source systems, or evolve into a system of record that eventually replaces legacy systems and simplifies the enterprise architecture. Because of its ability to work with legacy systems, or to gradually replace them, and its ability to support an evolutionary approach to legacy modernization, many banks find that an ODL is a critical step on the path to full modernization of their enterprise architecture. In terms of architectural setup, some banks may want one ODL for each of their data domains but others may find certain domains can share an ODL. The ODS/ODL template can be applied in a variety of ways — without breaking the bank’s internal standards. For example, imagine an ATM terminal connected to a MongoDB-based ODL. With the ODL in place, data from the mainframe is replicated in real time and made available for the consumer to check their most recent transactions and account balance on the ATM. Customer balance information, however, also still resides on the source system. Using the ODL to replicate and display information from the mainframe avoids customers having to face annoying delays while they wait for the information from a mainframe to load. At the same time, risk management and regulatory reports can still be run against a mainframe as a batch “end of day” process. With an ODL in place, data can flow from the mainframe to a newer architecture, giving the ATM broader capabilities that expand customers’ banking experiences, such as the ability to pay invoices, change addresses, or even open additional accounts. Nightly batch, bulk load, or real-time updates: MongoDB is flexible enough to connect to any data source, be it classic DB2 for zOS, Oracle, SQL Server, Hadoop-based legacy, or even Excel spreadsheets. MongoDB has the appropriate connectivity to ingest any data at any time from anywhere. Enrichment, data domains, and data marketplaces: With its document data model, MongoDB has the capability to bring data into data domains versus using convoluted table schema and ETL processes. The domains emerge naturally based on the application and user community requirements. Security, schemas, and validation: MongoDB has multiple layers of security, including password protection over encryption in flight and at rest, plus granular field-level encryption. All with external key management. MongoDB can be used as an operational data layer Take the next step in mainframe modernization Because many core banking capabilities are transactional and can be handled with daily batch processing, mainframes remain the backbone of our financial system. Mainframe modernization might sound daunting, but it doesn’t have to be. Banks can choose to proceed along a straightforward and predictable path that allows them to modernize iteratively. They can receive the benefits of modernization in one area of the organization even if other groups are earlier in their modernization path. It’s possible to do this while supporting increasingly complex data privacy regulations and, importantly, minimizing risk. Banks and other financial institutions that have successfully modernized have seen cost reductions, faster performance, simpler compliance practices, and rapid development cycles. New, flexible architectures have accelerated the creation of value-added services for consumers and corporate clients. If you’re ready to learn more about how you can accelerate your digital transformation and minimize risk, “ The 5 Phases of Banking Modernization ” now.

April 21, 2022