Why Are Distributed Databases Perfect for Financial Services?
Financial services firms have been on the leading edge of technology adoption for decades, starting with the pneumatic capsules you can use at drive-up bank windows to make deposits or withdrawals, followed by credit cards starting in 1950, and the automated teller machine in 1967. The innovations since then have only accelerated as technology has evolved.
While many feel like we’ve been talking about digital transformation forever, the conversation really started with the introduction of the iPhone in 2007. Putting a powerful computer - connected to the internet - in the hands of billions of people has radically changed customers’ interactions and expectations when it comes to banking.
Financial Services Leverage Technology
Still, banks and other financial services firms have continued to leverage technology and change the way they conduct business. Consider the evolution of core banking, mobile technologies, and the use of algorithms to automate transactions. However, financial services have typically created this new innovation and technology deployment on top of existing technology. This significantly increases the technical complexity and creates technical debt.
As Charles Araujo, industry analyst at Intellyx, says, “Financial services firms are thus finding themselves at an inflection point. An entirely new era of innovation lies in front of them and, ironically, they must find a way to shed the technical baggage they have accumulated by being on the leading edge if they want to remain there in this new era.”
Tackling Transformation at the Right Pace
Tackling technical debt is a challenge for any organization that’s existed for more than a few years, and deciding how and when you break apart monolithic architectures to take advantage of new technologies can be a daunting task. The financial services industry has been relying on many elements of core technology and architecture for a long time - and it has been stable and reliable. Dismantling it wholesale is neither appealing nor practical. Change takes time, and being able to choose how, when, and which critical applications to move to the cloud is essential. There are serious considerations to make as these organizations balance the requirements of compliance, security, and privacy that are a driving force for financial services institutions.
Read this whitepaper to learn Charles Araujo’s insight about distributed databases and how they solve these issues for financial services organizations transitioning to the cloud.