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What if you could reduce infrastructure costs by 60%?

What if you could reduce infrastructure costs by 60%?

The financial services industry is facing an uphill task to meet the demands of a growing digital consumer base while also dealing with greater competition, shrinking windows of opportunities and margin pressures brought on by the post-pandemic environment. Global Banks have responded to challenges with strategic action plans that seek to reduce costs and rationalize investments for the future.

Banks have wasted no time cutting back on IT and operations costs, trimming the number of channels or service points, outsourcing processes, and even reducing headcount. Increasing operating costs and increased digitization have forced banks to adopt technologies such as cloud computing, automation, and AI as levers to enhance customer experience, protect margins, stay compliant and sustain their competitive edge.

It is found that 43% of banks globally cited increasing costs as a critical driver for cloud adoption. The same study by the Economist Intelligence Unit for Temenos also found that 21% of banks globally mentioned the benefits of improved customer experience for adopting the cloud.

A 60% reduction in infrastructure costs is practically gold in the prevailing global environment for any bank. Let’s take a closer look at the challenges and the levers for cost reduction.

Challenges to cost-efficiency

Several banks globally recognize that using an outdated legacy infrastructure is one of the biggest hurdles to cost efficiency and digital transformation. Burdened with technical debt for years, banks are putting up a desperate front to modernize or adopt a Cloud Native architecture. With rising ticket volumes, orchestrating IT operations across such a heterogeneous environment is proving expensive and tedious.

With so much innovation in banking, evolution of technology and a volatile market, regulations are continuously evolving, and regulators are clamping down harder on non-compliance with hefty penalties. The banking industry has been incurring significant expenses to adapt to these changing regulations.

As new age fintech companies constantly challenge the paradigms of customer experience and business models, Banks have to continue to invest on and more importantly focus on innovation to stay competitive.

Levers to lower the total cost of ownership

  • Adoption of Cloud – The shift to cloud is no longer a choice. Universally, multi-cloud or hybrid cloud adoption is now the pivot for any banking transformation. However, the cost of cloud infrastructure or hyperscalers is far from being transparent and hard to forecast accurately. It is cited that 60% of banks globally refrain from adopting cloud computing because of its risks. Moreover, Banks are happy to move transactional and tactical data/workloads to cloud but stop short of moving strategic data. A well laid out roadmap on migration to the right cloud cannot just mitigate risks associated with cloud migration, but optimize costs of hyperscalers significantly
  • DevSecOps Process Automation – Automation is an important means to optimizing costs. Banks can build scaling plans that dynamically provision or allocate resources to meet changing demands. CI/CD process automation and automating any other process that has an SOP can significantly reduce tickets, effort, and cost. Even Repetitive/ Predictive resolutions can be automated to optimize availability and costs.
  • Integrated ecosystems with unified improved visibility – Banking enterprises are dealing with management of complex IT architectures where legacy infrastructure co-exists with modern cloud native architectures. Siloed functions and poor visibility raise the risks of low availability and failed customer experiences.
  • Compliance and risk monitoring – Keeping up regulatory changes bears significant effort and cost. With automated risk monitoring and compliance management, Banks can avoid errors and penalties besides bringing down the overheads to stay compliant to all regulatory needs.
  • Resource Optimization – With the choice of smart platforms and automation solutions, Banks can look to reduce manual effort to address tickets. With a balanced team structure, IT organizations can reduce headcount and shift focus of the team to more strategic initiatives.
  • Intelligent Engine – Using AIOps solutions, banks can automate their business operations to speculate problems and eliminate them before it occurs. By utilizing actionable insights derived from historical and real-time data, AIOps enables peak performance. Proactive remedial actions that run automatically when set in place will allow 80% of tickets to be eliminated, while the remaining 20% will be targeted to optimize incremental business benefits.
  • Data Storage and Optimization –Banks can achieve cost-efficiency with Dynamic storage management solutions. By reducing data duplication and considering the required performance, data retention, and access patterns, significant reduction in costs can be achieved.

SLK Approach

Intelligent Infra by SLK PeakPerformTM constantly transforms and offers actionable insights to drive peak performance. These actionable insights are obtained by thoroughly analyzing historical and real-time data using AI/ML technologies. Working with an outdated legacy system while keeping cost-effectiveness in mind can become a significant challenge. In addition to being lengthy and time-consuming, modernizing legacy systems can become expensive.

SLK’s Intelligent Infra services has the capability to deliver cost-effective solution that can be implemented across existing platforms with ease. SLK Intelligent Infra also helps in Banks attaining peak performance and, at the same time, improves customer experience. Clearly the future belongs to organizations that adopt intelligent IT operations with a 360-degree view into their operational efficiencies and business outcomes.

Authored By: Maruthi Prasad M S

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