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Sector focus: What can we learn from financial services?

Sector focus: What can we learn from financial services?

Looking for some inspiration on how to apply the Hybrid IT model to your organisation?

If you’re headed in this direction for the first time it can be useful to look at some of the work going on in industries outside of your own.

Take a look at financial services, for example. This is a sector that struggles with legacy IT systems creaking at the seams.

Last year, for instance, banks in Europe spent an estimated £40 billion on IT but only £7bn of that was investment in new systems. The remaining £33bn was spent maintaining increasingly out-dated legacy systems.

You only have to look at recent outages to see the huge negative impact this can have on customer experience, at a time when we are more digitally savvy and demanding than ever before.

Alongside this, established financial services players have been hit by digital disruption from all sides – you just have to look at Apple Pay, which is set to shake-up payments in the UK.

On top of this, we’ve also seen the rise of nimbler challengers like Transferwise, WePay and Stripe that are more agile and responsive to customers’ needs.

Treating ‘SaaS as the norm’, these start-ups can get new products and services in front of customers in an instant. This has forced the big boys to act.

The challenge for incumbents is how they address the need to change, while still protecting their valuable legacy businesses, which often involve the data of millions of customers.

It’s worth stressing, then, that Hybrid IT is about evolution, not revolution.

It’s highly unlikely a big international bank will want to go to 100 per cent cloud right now (if ever) due to the complexity, risk and cost associated with the change.

Taking a ‘hybridising’ approach can let you chip away at the legacy technology, minimising the risk while also modernising and reducing cost.

Most financial services CIOs will probably want to deploy both public and private cloud alongside traditional on-premise IT, for their range of needs, alongside numerous vendors.

A progressive CIO could also use a Hybrid IT approach to rebalance their existing infrastructure between the classic ‘keeping the lights on’ model and a much more strategic role.

For global organisations, central IT teams can also use a Hybrid model to win back control and trust from federated business units that have done their own thing. And they do this by delivering the agility and flexibility that still allows business innovation and growth.

In an industry that is going through so much disruption and requires such fundamental change in response, the Hybrid IT model could be a vital part of the answer.

Have you adopted a Hybrid IT model? How has this helped your organisation? We’d love to hear your stories, so get in touch with editor@thehybridhive.com.

Image credit: Davide D’Amico

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