How Digital Transformation Is Driving The Finance Sector

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Successful digital transformation depends on the connectivity of agile and scalable networks, Azz-Eddine Mansouri, General Manager at Ciena Middle East, tells us why.

The recent growth of ‘neo-banks’ offering online-only services has significantly impacted the finance industry.

More traditional high street banks are under tremendous pressure to attract and retain enterprise, business and retail customers, and in order to remain competitive, these financial institutions are addressing the fintech challenges by opening up their systems with application programming interfaces (APIs) to allow authorised access into their banking services— levelling the playing field.

However, financial institutions need to take into consideration the underlying network, to ensure the success of digital transformation services. The disruptive technologies currently deployed by banks require a flexible network that provides scalable, low latency and secure connectivity to data centres and the cloud.

The advancement of scalable, programmable networks brings both the promise of rich applications and ever-improving economics, but also the need for ongoing development to ensure networks are increasingly trusted, reliable, and secure.

Many fintech applications, such as bitcoin and blockchain technologies, require connectivity, and many distributed financial transactions today require data for common practices including authentication, authorisation, and accounting, that reside across multiple data centres. From a security perspective, there are always security threats that have the potential to disrupt a banking system through a DOS attack on the network.

With surging network traffic posing as a consistent threat to the security of the network, a reliable and efficient network is critical to a business’ longevity. With the right network capabilities, financial institutions can deploy emerging fintech applications more efficiently and accelerate open banking platforms that improve customer services and loan decisions.

Banks that have powerful and flexible networks are already launching AI assistants for their clients in order to improve their experiences. Additionally, other banks are connecting big data analytic solutions, blockchain and robotic process automation (RPA) in the cloud to accelerate customer services, make better lending decisions, and improve operational efficiencies.

Middle Eastern countries are at the forefront of the adoption of fintech as one of its main drivers is the overall customer preference for digital banking, according to an S&P report. More specifically, according to Bloomberg Intelligence, the UAE is the country with the highest number of fintech start-ups in the region (a total of 67), followed by Turkey with 44 start-ups and Jordan and Lebanon with 30 each.

 Adaptive network as a solution

As digital transformation depends on the connectivity of agile and scalable networks, legacy infrastructures are beginning to curb enterprises. Most inherited networks are usually slow, complex and inflexible, making it almost impossible to adopt new technologies that are scalable and provide the services and experience differentiators that customers want.

There are also questions about the reliability and performance of cloud-based services. If an inherited network cannot respond fast enough to application bandwidth demands or recover from performance degradation or a service outage, the ability to adopt cloud services may be limited.

In addition to these challenges, many inherited networks are very inflexible. Implementing changes requires long, manual interventions that often take weeks or months to complete, delaying the release of new differentiated services for customers.

It is imperative that financial institutions establish a strategy for transformation that considers the needs of the clients— not limited by the obstacles created by the inherited networks. For banks managing their networks or banks using managed services providers, it is important to guarantee that their connectivity solutions are based on a programmable infrastructure that can adapt to support the new technologies implemented in their private cloud or data centre.

Having an adaptive network that connects, senses and acts in order to quickly adjust to meet changing application demands and host new digital banking services, is imperative to improve customer experiences. It is undeniable that the financial services industry is undergoing the most radical change they’ve experienced in over 100 years as the digital disruption of the industry accelerates.

In order to keep the pace and ensure success in their digital transformation journey, it is crucial that companies have a network that can adapt to ever-changing requirements, by combining programmable infrastructure, analytics, software control and automation to make network complexity and demand manageable.