Data Supply Chain Drives Competition in Financial Sector

Ansh Patnaik, Senior Director at Delphix

Financial service firms are winning market share from competitors by gathering and acting on customer data across an increasing range of applications and delivering customer-facing services faster than their peers. According to a recent survey, the rate at which consumers switched primary banks increased by over 40% in 2013. Consumers cited overall customer service and the availability of online, mobile services as key reasons for making a switch.

With more demanding customers, evolving interaction channels, and growing competition, banks have made IT modernisation a priority. Modernisation projects promise to reduce systemic operational costs while improving productivity of IT operations and development teams. Unfortunately, governance and security related challenges pose some of the biggest barriers to modernisation, impeding the promise of faster time to market.

Compliance Redirects Precious IT Resources

Ansh Patnaik, Senior Director at Delphix

Online transaction growth has been mirrored by rising cyber-security breaches and fraud, resulting in regulations like PCI, GLBA, and BSA-AML. The recent financial crisis of 2008 sparked another wave of regulatory reform. Compliance with stress tests mandated by CCAR, EMIR, Basel III, and MiFID involve an expensive, complex chain of data collection, modelling, and reporting that consumes IT budgets and erodes productivity across IT and lines of business alike. For example, resources for developing a new online banking application may be redirected to deliver compliance reports or to re-instrument applications to support evolving audit requirements.

Governance Limits Application Retirement

Mergers and acquisitions, along with siloed IT organisations, have led to expansive application portfolios. Operating legacy applications can be expensive due to specialised labour costs and licensing penalties for unsupported hardware and software. Rationalising application portfolios and retiring stale, redundant applications can improve business processes and eliminate cascading legacy application costs. Compliance-driven data retention requirements, however, must be satisfied. Unfortunately, traditional application data archival solutions fall short of required recovery SLAs, putting organisations at risk of audit failure. These challenges create resistance from audit and compliance teams, often preventing such projects from getting off the ground.

Security Challenges Block New IT Models

The pressure to reduce costs in the financial sector has sparked interest in emerging IT models that can transform core IT metrics such as agility, cost efficiency, and utilisation. Banks lead other industries when it comes to building out efficient private clouds, considering public clouds for new application development or burst capacity, and moving to offshore or outsourced staffing arrangements. A large fraction of banking applications, however, contains sensitive and regulated data. Security becomes an even bigger concern with evolving IT models that fundamentally reduce control and visibility. Invariably, modernisation projects and their potential return are blocked by security and governance related objections.

Governing the Data Supply Chain

IT’s response to growing governance, compliance and security challenges has been largely reactive. Point solutions have cropped up to tackle specific compliance requirements, and organisations have ended up with an amalgamation of compliance tools and solutions that address limited controls. Moreover, these investments come with architectural dependencies that block fundamental change and evolution in IT models.

With applications sprawling across locations and platforms, the current model for governing and managing data is broken. Data grows constantly across multiple silos (files, databases, big data, etc.) and locations (on-premise, private clouds, public clouds), without a consistent solution to collect, govern, and deliver data for compliance or application development projects.

Delphix Virtual Data Platform

Delphix re-invents the data supply chain by virtualising, governing, and delivering data on demand. With the Compliance Engine, Delphix non-disruptively synchronises with source data in any format and from any location.

Delphix then secures (or masks) this core, primary data and tracks changes continuously, ensuring data history and lineage. Delphix can deliver virtual data environments from any point in time, on-demand, in minutes, in 1/10^th the footprint of physical copies—enabling elastic, parallel environments as needed. As a result, compliance-driven application development efforts no longer have to disrupt current IT projects.

Applications can also be retired with the confidence of full, on-demand recoverability. By securing the core data that underlies applications, Delphix ensures that derived data can be readily delivered to any location or format while controlling security risk. Additionally, by virtualising and de-identifying data within application environments, Delphix can eliminate 90% of the surface area of data at risk.

We work with more than 100 of the Fortune 500, including several of the world’s largest financial institutions, use Delphix to streamline governance, accelerate modernisation, and improve their ability to compete.