Over the past weeks we have explored the insights from our research with Qorus. The in-depth interviews and surveys with chief data officers at leading banks around the world have revealed a sector on the cusp of significant acceleration in their use of data analytics. We have characterised this as the shift from a pre-industrial cottage industry creating pockets of best practice to highly repeatable and automatable analytics used at scale to drive new value across the enterprise. Moving to cloud infrastructures is an essential element of this transformation but making the right shift in the right way is essential to protect critical data assets and deliver real return on investment.
We know that our customers in financial services see the cloud as critical to building the flexible, scalable and cost-effective data platforms they need to deliver next generation analytics to their business clients. Only three per cent of our survey respondents suggested that they planned to stay entirely on-prem for their data needs. The majority, 57% were looking to hybrid cloud approaches as the best combination for their requirements.
Many understood the potential of the cloud to help dissolve existing data silos and create consistent enterprise-wide data platforms on which diverse data sets can be combined, integrated and used to drive powerful analytics.
However, they also recognised that creating these platforms was not always straightforward. Clients have reported that whilst department or project-level cloud-based applications from point solution providers initially appeared to offer benefits they were often hard to scale. Costs quickly ran out of control and performance suffered as data volumes increased. Proliferation of stand-alone cloud solutions often complicated rather than solved issues around silos of data. Data moves from discrete systems to dedicated cloud analytics applications were also time consuming, prone to error and added costs.
The aspiration, repeated by many, is to, as one CDO put it; “Build a cloud-based unified data platform as the core foundational element, which places data at the heart of the organization.” Or, as another said; “We are focused on creating a cloud data analytics platform with modern capabilities. We will transfer the entire analytical ecosystem of the bank to this platform.”
Against this desire to move everything to the cloud are the concerns around operational resilience. Regulators around the world are waking up to the potential concentration and contagion risks inherent in reliance on a small number of global cloud service providers. Financial Service organisation must demonstrate their ability to provide core services in the event of a stressed exit from their cloud. Although highly reliable and secure, even hyperscale providers suffer outages. The requirement to show rapid recovery of data in these scenarios lies behind that majority seeking to develop hybrid cloud solutions. The ability to quickly move data and analytical applications from cloud to on-premise, or between different cloud providers is essential to CDOs in financial services.
This is where Teradata’s approach to the cloud, and to using it as the essential infrastructure for an enterprise-wide analytical infrastructure differs. Rather than constantly moving data to different cloud-based processing engines, bring the processing to where the data naturally resides – in Teradata. Our recently announced VantageCloud Lake and ClearScape Analytics allow businesses to connect, integrate and analyze data within a cloud-based Teradata platform. As a consistent platform that is identical whether in a single cloud (public or private), multiple clouds, or on premise Teradata provides operational resilience as well as flexibility and unrivalled analytics performance at scale.
Teradata is now working with some of the biggest banks and financial services businesses to help them deliver this shared aspiration of scalable, flexible and cost-effective analytics in the cloud. Crucially, in today’s volatile environments we are able to demonstrate to these customers that we deliver sustainable return on investment, even as volumes and variety of data increase, and more and more analytics models are deployed to support diverse requirements from across the business. Just as importantly, as trusted partners who have handled highly sensitive, regulated data at the heart of the financial system for decades, Teradata represents the ultimate safe pair of hands when it comes to making the shift to high-performance, high-stakes data analytics at scale to drive the next transformation in the sector.
The Qorus report has provided illuminating insights into the state of data analytics in the financial services sector and identifies the tipping point for cloud-based data analytics platforms that can truly scale to meet the needs of the modern business. In the next series of blogs I’ll look at trends emerging in 2023 that could accelerate these transformations further.
Please do get in touch for additional information on any of the topics raised in these series of blogs.