PLACE FINANCIÈRE & MARCHÉS — Fonds

CARTE BLANCHE

“Cloud will be everything!”


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All the businesses from the Fund industry are facing the digitalization of one or many dimensions. In a context of Covid-19, stability, resilience, security, and robust risk management capabilities are becoming of paramount importance. What has been the technological impact? Why it’s imperative to be Cloud first and fast?

For several years, businesses have been busy digitalizing one or many dimensions of their organizations. Digitalization is also important for the Fund industry, where interconnectedness and complexity have grown organically. New products and new ways of working are entering the industry. All of these drivers are pushing organizations to strive for a renewal of their structure and processes.

In this context, stability, resilience, security, and robust risk management capabilities are of paramount importance. However, these elements have traditionally been provided by large, complex technology estates (with global networks, data centers, compute and storage services, custom software applications, packaged software applications, siloed business and technology estates, and dispersed global footprints). This legacy architecture limits the ability of our industry to be agile. Not only agile when it comes to innovation and adapting with the market, but also agile in terms of cost management. 

Then, in 2020, the pandemic arrived. In terms of technological impact, COVID-19 effectively hit a giant “fast-forward” button, accelerating ten years of change into one or two years, propelling us into a new reality that requires a new response. 

The pandemic emphasized the need for the Fund industry to accelerate towards a more agile, data-driven and intelligent way of doing business. Innovating to optimize revenues and costs will require large-scale modernization and re-engineering of our processes, functions, applications, and infrastructure.

Reducing costs while striving for a more agile way of working can only be achieved by migrating to Cloud. Instead of a CAPEX investment approach, where companies buy all the servers and infrastructure (including software), Cloud allows us to adopt an OPEX approach to investments. Cloud also offers us the opportunity to modulate and scale infrastructure over time, adapting to and anticipating the needs of our clients.

The flexibility and advantages Cloud offers are not only rooted in cost reductions but also extend to every part of the business. Cloud enables companies to better analyze data, consolidate reports, create dashboards and infuse the company with data-driven insights. Cloud also opens the door to machine learning and AI in day-to-day business operations, for example, by plugging data analytics solutions into systems in order to build next-generation market insights. All of this will increase the scalability of the Fund industry and reduce operational risks.

The Fund industry ecosystem is also becoming more and more aware of the strategic importance of developing data and analytics capabilities to remain competitive. It is also aware of the associated impact on the legitimacy and reputation of companies that are able to build a Cloud-based structure supported by data, in a market where data and flexibility are valued.

Above all, the pandemic has highlighted the need for our industry to adapt to a fast-changing environment. Cloud native solutions can boost the integration of third-party applications and services, allowing companies to streamline their technology estates (e.g., replacing custom built apps with standard SaaS solutions) and provide integrated services to their clients.

In an industry where cybersecurity (malware, privacy, data breaches, safe computing with increased teleworking) is a top priority, failing to implement a safe environment for all stakeholders will have major consequences. Moving to the Cloud could enable us to reduce our cybersecurity investments, and instead allow Cloud providers to handle it for the industry.

Lastly, Cloud permits us to address two major ICT challenges related to Green computing – energy usage and resource consumption. With virtualization, dynamic provisioning environments, multi-tenancy, and Green data centers, Cloud offers lower carbon emissions and energy usage. Companies pay for and use the storage they need without having to invest in large-scale data centers that might never be used to full capacity. Fewer (or no) data centers will improve our overall ESG score in the near future.

Overall, Cloud represents a reliable and sustainable solution to the challenges our industry is currently facing. Early adopters will gain a short and long-term business advantage in terms of client experience and business development, making it difficult for laggards to catch up over time.

Before COVID, companies with a strong digital core outperformed the laggards by up to two times. This gap has now widened to five times, creating additional headwinds and questions for many companies.

It’s time to move to the Cloud!