It’s Blockbuster Night! Say that to any Gen-Xer and it should bring a smile and recollection of days gone by. Netflix took Blockbuster by storm and grew from mail order DVDs to the streaming behemoth they are today.
One day, will we reminisce about brick and mortar financial services companies being replaced by digital-first financial services companies like Alipay, Block, Grab, Klarna and Paypal? While traditional financial services has some built-in regulatory barriers that makes it harder to be completely disrupted, companies are still at risk of losing market share and market cap.
The need for speed
The pandemic brought into focus the need for financial institutions to become more agile and resilient in the event of any disruption, not just from innovative competitors. Those that were already transforming their business were able to adapt quickly and keep the momentum going. According to McKinsey, fast organizations outperform others by a minimum of 2x on a range of outcomes, including operational resiliency, financial performance, and growth. McKinsey’s “The need for speed in the post-COVID-19 era–and how to achieve it” survey also showed a unique difference for banking and insurance compared to other industries. They were the only two industries that selected productivity as the most common reason changes were made due to COIVID-19.
Achieving agility, productivity, and speed is not simply transforming and changing as fast as possible. Organizational agility is about looking for innovative ways to build resilience, protect revenue streams, streamline operations, and ensure employee engagement. What holds back some financial institutions from achieving these goals are the inflexibility of legacy systems and significant technical debt.
Here’s how traditional financial institutions can pivot:
Cloud is the center of it all
Moving to the cloud is a strategic mandate that represents a $1 trillion value capture opportunity according to McKinsey. Cloud is where emerging operating models and technology will converge, and where many future products and services will be created that better future-proof the institution. The challenge is the existing infrastructure. Breaking down this challenge requires C-suite recognition of the need for cloud-centric application and infrastructure transformation.
Today’s financial leadership requires a degree of cloud fluency and commitment to an accelerated cloud adoption and deployment strategy. This includes appropriate financial, governance, and risk controls shared by lines of business and the information technology organization. A smooth transition to the cloud can result in greater autonomy for lines of business to pursue new business opportunities. Cloud-centric application and infrastructure transformation requires the ability to choose best-fit solutions, regardless of the public or private cloud they will reside on. This is the reality for many financial institutions as they partner with cloud-native FinTech solution providers for growth, diversity, and greater resilience.
Cisco Cloud Solutions, inclusive of Cisco’s Hybrid Cloud and Full-Stack Observability offers, are designed for these multi-cloud environments. They provide cloud-neutral connectivity, security, and compute and leverage data-driven performance analytics to ensure better operational visibility and resilience.
Secure the brand
Along with cloud transformation, the permanence of hybrid work models has redefined the scope of business resilience. As more business execution takes place outside the four walls of a traditional financial services workplace, so does the need to expand protection against breaches, data loss, data misuse, and internal fraud. Additionally, the expansion of digital channel capabilities often involves the integration of cloud services, distributed data sources, third-party applications, and agile development cycles. Each of those present a different risk and unique security requirements. Hybrid work is accelerating a shift to perimeter less security. It is a primary use-case for a Zero-Trust security approach where users and applications only have access to the corporate resources they need.
Whether your employees are working in person, remotely, or a combination of the two, Cisco Secure Hybrid Work provides all the solutions needed to protect an institution:
- DUO – to verify user identity
- Umbrella – cloud-delivered security for branch offices and remote users
- Secure Firewall – visibility and control of encrypted traffic across cloud environments
- Secure Endpoint – rapid incident detection, response, and remediation of advanced threats
- AnyConnect – secure access to networks for any user, on any device, at any time, in any location
- Secure Email – detect, quarantine, investigate, and remediate cyberattacks that target your email
Additionally, Cisco SecureX is an powerful SaaS platform which unifies visibility and threat intelligence from Cisco Secure solutions and across all information security domains. It provides the fastest time to threat identification with an intuitive, yet detailed, view of the scope of active threats across both Cisco and third-party security solutions.
Investments in cloud and security are the foundation for business resilience in today’s business environment, enabling financial services institutions to accelerate transformation at scale and with speed. Unlike the disruption seen in other industries, this shift has helped financial services become more resilient. It has also provided greater agility to meet the evolving needs of consumers and businesses, ensuring competitiveness that makes Blockbuster-scale disruption highly unlikely.