According to fintech provider Broadridge, more than half of C-level executives in financial services firms agree that digital transformation is currently the most important strategic initiative for their company. They now spend around 27% of their overall IT budget on digital transformation initiatives, compared to only 11% in 2022.1
Why increase investment in financial services digital transformation, which includes partnering with colocation data centers? The answer is that they are seeing improved operational efficiencies and, arguably more importantly, are able to provide richer customer experiences (CX). Better CX equates to happy, loyal customers, and makes the companies “magnets” for providers that offer complementary services or solutions.
Financial services enterprise decision-makers pay attention to industry trends. That helps road test an IT strategy in light of business goals, infrastructure requirements and CX objectives. Let’s touch on three trends that influence the design/delivery of financial services and CX, as well as the hybrid IT infrastructure that can prepare you for the future.
The use of artificial intelligence (AI)/machine learning (ML) and mobile apps in financial services are timely. You can find a great deal of information using, ironically, search tools powered by AI and ML. With that in mind, we decided to turn attention to other technology trends that are influencing the financial services industry.
Banks that invest in embedded finance initiatives expect to improve overall CX and create revenue while lowering the cost of new customer acquisition and retention. McKinsey says embedded finance reached $20 billion in revenues in the U.S. in 2021 and estimates that the market could double in size within three to five years.3 The article goes on to stress the importance of differentiation in product breadth or depth.
Gartner’s list of top priorities for the banking and investment industry include growth, digital transformation and consumer/user experience. Gartner research puts distributed cloud (85%) second only to AI/ML (95%) on the list of 10 technologies most likely to be implemented by 2025.3
We’ve developed a white paper that discusses these trends, related research, challenges and opportunities: Financial Services Industry Trends: Data Centers Enable Next-Gen FinTech Customer Experiences.
As financial services decision-makers tackle digital transformation, they are exploring technology integration, geographic expansion, new services and cloud’s role. And they’re increasingly turning to colocation data centers for guidance to solve interconnection challenges and accelerate digital transformation.
CoreSite experts welcome the opportunity to share our expertise as we work together to develop a strategy that eases your firm into the future. Our customized hybrid IT solutions and modern, compliant data centers offer 100% service level agreement (SLA) uptime while helping you lower cost, scale dynamically, manage risk and reach new markets easily through interconnection.
1. Broadridge Study, Digital Transformation Enters a New Phase – Here’s What Comes Next, 2023 https://www.broadridge.com/2023-digital-transformation
2. McKinsey, Embedded Finance: Who Will Lead the Next Payments Revolution? https://www.mckinsey.com/industries/financial-services/our-insights/embedded-finance-who-will-lead-the-next-payments-revolution
3. Gartner Infographic, 2023 CIO Agenda: A Banking Perspective https://emtemp.gcom.cloud/ngw/globalassets/en/information-technology/documents/2023-cio-agenda-banking-and-investment-infographic.pdf
Joe brings more than 22 years of telecommunications and data center industry experience to his role as Northeast Sales Engineer.Read more from this author