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The face of banking is changing. It is no longer the helpful (or sometimes less so) cashier behind the glass counter. It is now the smooth, luminous screen of a smartphone, and with a few quick clicks, we conclude bank transactions that might have otherwise taken a couple of hours and a trip through the traffic. Digital banking in general has seen steady growth over the last decade, but over the last few years, mobile banking in particular has seen a steep increase. The banking industry, as well as the broader BSFI sector, recognising this trend, has been steadily expanding the offerings in their digital portfolio to cater to customers’ convenience; for example, today customers can take a photo of a cheque and deposit it via their smartphone – without leaving their desks.
While it was the consumers who propelled the proliferation of mobile banking, increasingly it is corporate consumers also conducting business transactions via this convenient medium. A recent report highlighted this fact – mobile banking transactions surged towards the end of 2015. RBI data showed that the value of mobile transactions grew by 82 percent over the September-December period and this increase was attributed to corporate customers conducting business transactions in addition to continued growth in retail mobile bank transactions. As a result, the banking and financial services industry is investing in IT and infrastructure to provide increased services and applications to target corporate business. Globally as well, mobile banking users are expected to cross 1.75 billion, which translates to almost a third of the global adult population (32 percent).
How does the growth and evolution of the BSFI sector connect back to storage? It was flash storage that was at the core of the mobility revolution, helping phones get sleeker, smarter and more powerful. And now it plays an important role in the enterprise side of things as well. In addition to the challenges of serving a rapidly growing digital customer base conducting millions of transactions daily, the banking and financial services industry also has to handle a heavy compliance and regulatory load. Furthermore, as it has done other verticals, data analytics is transforming the sector. It is driving decision making about how to grow revenue, control costs and mitigate risks. This makes it imperative for banks, financial and insurance companies to build and manage large data stores, along with the technical muscle power to process it in real time for actionable insights.
A high performance and robust IT platform built for reliability and security is vital to the functioning of banks and financial firms. And smart storage is a critical foundational pillar of IT for digital banking and wealth management. Legacy storage systems in banking were historically structured to accumulate data, not for high speed retrieval and processing. Moreover, financial data usually went into multiple departmental silos. Banking today needs a consolidated data store that can handle different data types which is also structured for fast access for disparate banking functions: Secure and fail safe financial transactions, for real time data analytics, and for regulatory and compliance management.
High speed storage is of the essence for massive databases to perform without latency issues. There is a clearly demonstrated link between performance latency and lost revenue which takes the form of lost transactions and customers, not being able to use business data in a timely manner for strategic planning, loss of employee productivity, etc. Additionally, the banking industry has high security requirements, and implementing these necessary procedures naturally take a toll on performance.
It is often the case that large organisations in the BSFI sector have legacy software and systems in place that aren’t able to handle the exponential growth in transactions and data from the financial markets, and have deteriorated unacceptably in their performance. However, these systems cannot be easily or quickly modified or replaced because of sensitive issues of security and compliance. These organisations are realising that a surefire way of providing a significant and reliable performance boost is by making the storage system do the heavy lifting and provide substantial performance improvements.
The reading from and writing to the storage device (known as I/O) is very performance intensive, especially at the scale of transactions that occur in banking and financial services. Storage that provides much higher performance during these data transfers by making optimal use of all available computational power goes a long way in reducing latency across processes. Data retrieval in flash based systems is instantaneous in contrast to traditional hard drives. Even when handling a large number of simultaneous operations, the performance of a centralised flash storage system is up to 10 times fast than traditional hard drives. These storage solutions provide both the necessary large capacity as well as the high performance needed to offset CPU intensive processes intrinsic to the financial industry.
Furthermore, enterprises across verticals have been recognising the fact that flash today is a cost effective option, after taking into consideration the total cost of ownership – steadily falling prices, lower energy and space requirements all add up. With speed and efficiency being highly prized in the digital marketplace, banks and financial firms have been capitalising on the benefits of flash and using it to form the core of their storage solutions. Its versatility and range of capacities and form factors makes it an easy choice for any mission critical enterprise.
- By Vivek Tyagi, Director for India business development, SanDisk Commercial sales and Support at Western Digital Corporation.
(This article expresses the views of the author and not necessarily that of his employer.)
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