By James Johnston, Regional VP at Cloudera  

The vast majority of financial institutions, along with many other businesses, have gone through rapid digital transformation in the past two years. As evidenced by recent research from Cloudera, the drive to digitise is only set to continue as managing data with at least some cloud capacity is a priority for many IT decision makers (87% ITDMs) within their organisation. What’s more, 85% currently house data and performance analytics in some cloud capacity. Taking into account the changes the financial services has been through, and with uncertainty still on the horizon, it seems a prevalent time to reflect and see what the year of 2022 has to hold.

Hybrid data cloud becomes integral to financial industry

In the past two years, more and more banks have turned to cloud adoption. From HSBC announcing its use of AWS for public cloud business operations to Banco Santander migrating 60% of its IT infrastructure to the cloud. However, in 2022 its hybrid data cloud that will be front of mind for key decision makers.

The reality is that data-centricity remains paramount for all financial businesses wanting to grow and adapt. The introduction of regulations such as Schrems II means being able to access and analyse data whenever it may sit is a top priority for businesses. With this in mind, it is expected that financial institutions will be investing in hybrid data cloud throughout 2022. In fact, the majority of ITDMs (87%) agree that businesses that implement a hybrid architecture as part of their data strategy will gain a competitive advantage.

Upskilling internally to triumph digitalisation 

The skill shortage across industries has been well documented over recent years, with businesses finding it a constant challenge to attract the right talent to support their digital transformation agenda. It’s been revealed that 66% of digital leaders in Britain say that lack of talent is responsible for slower digital transformation in their organisations and the financial industry is not immune to this. Coupled with the ongoing ‘Great Resignation’, the skill shortage remains increasingly hard.

As we kick off the new year, much of the responsibility will be on financial institutions to re-evaluate retention and recruitment approaches. Clear commitments need to be made to upskill the existing workforce to meet business demands and a collective endeavour will be essential in order to achieve this. A coordinated effort between financial professionals, government bodies and education institutions will be required to solve the skills crisis. In addition, data needs to be used more effectively. Findings from Cloudera reveal that nearly half (47%) of IDTMs plan to use data and analytics tools to help them address the challenges they face around workforce diversity in the next 12 months. Harnessing data in 2022 to help address the skills crisis will be vital.

Building AI ethically: address the bias and take more practical and holistic approaches

Throughout 2021 financial institutions have increasingly integrated AI into their operations and user-facing services. Alongside the benefits, there is an increasing awareness of how AI systems can cause harm, and how bias within AI systems can cement discriminations that marginalised groups already face. In the UK, this has led to activists taking legal actions. It has also resulted in the general public being more wary of how personal data is obtained and used.

In response to growing public awareness, regulators are frequently introducing and strengthening guidelines and legislation to tackle AI-facilitated harms. In 2021, for example, the European Commission proposed a risk-based legal framework  for regulating AI systems. It aims to prohibit ‘AI systems’ that are considered “a threat to the safety, livelihood and rights of people”. Legislative moves such as these aren’t silver bullets but they are signals to tech companies, and businesses using their products, to give genuine consideration to the ethics and potential harms of AI.

For this reason, this year we anticipate more companies, including those in the financial services, to have more intent in developing solutions that are founded in transparency, ethical uses of data and making obvious sense to humans. This necessitates an approach to AI development that integrates auditability, accountability and effective feedback loops into the machine learning lifecycle.

The future of 2022 

Much like 2021, financial institutions are walking into 2022 surrounded by uncertainty. In the UK, it’s reverted to home working and the appearance of new variants isn’t ruled out. While the last year has not been predictable, it has allowed financial organisations to get comfortable with a new approach to operations and set them up for the changes to come. To ensure success financial institutions will do well to prepare for hybrid data cloud, and keep attention on their talent and the ethical side of AI.