After several years, and even decades for some, most financial services leaders in 2022 understand that becoming a pure customer-first, digitally enabled financial institution, free from the proverbial 3-ton anchor of legacy technology, is a wildly complex and expensive undertaking. So, the following statement will likely not be a spoiler for most—rapid digital transformation and modernization continue on a large scale in financial services. However, plenty of questions probably come to mind when considering the industry-wide trends around modernization, including those tied to progress and new developments others are considering for prioritization.
The eighth annual F5 survey on the state of application strategy (SOAS) tackles some of these key questions, and I’ll cover the top 5 questions answered from the financial services edition of our SOAS report in this blog.
In summary, the results of our latest survey—including hundreds of top financial services organization leaders and practitioners from across the globe—reveal what modernization trends are on their minds now and in the near future.
1. Has application modernization accelerated in financial services?
With the pandemic driving more people to digital channels, this question seems like a no-brainer, but what’s more interesting is the almost total participation in application modernization in the sector. Our 2022 report highlights that 99% of financial services organizations are modernizing apps—a considerable jump from 83% in our 2021 report.
2. Are complex multi-cloud strategies common in financial services?
The cloud continues to play an important role in the sector, which is a positive sign that the industry is making strides away from such a strong reliance on dated monolithic technology. Survey results indicate that 71% of financial services organizations now have multi-cloud strategies. What’s more is how the industry will use the edge, with 87% of financial services decision makers planning to do so. Strong digital customer experience demand seems to be the motivation behind financial services organizations considering a move to the edge.
3. Are FinServ organizations satisfied with their current analytics or are they lacking key insights?
The data revolution that has been teasing the business world with more advanced use of AI/ML seems to have captured the imagination of the sector, with 98% of respondents saying they’re missing insights they need, and more than nine in 10 financial services expecting to use AI-assistance. The demand can be attributed to many areas in the business, but a prime example is the drive toward better meeting consumer demands for greater personalization, which requires better insights and more sophisticated analytics than are currently in place.
4. Have a considerable number of financial services institutions repatriated applications from the public cloud?
The promise of cloud efficiencies has proven to require more nuance in execution than previously thought. App repatriation exploded 168% over previous expectations and nearly three-quarters of financial services organizations have done so according to our report. This move to bring apps back home is likely being driven most by cost, control, and flexibility needs.
5. Would leaders and practitioners in financial services trade security for even a small improvement in performance?
Balancing security and customer experience is one of the most difficult tasks institutions face today. The pressures to keep customers from getting annoyed with high friction-causing security solutions in their digital experience seem to be getting an edge, with nearly three-quarters from our survey saying they would trade security capabilities for better performance. In fact, a full third of the industry’s decision makers said they’d trade security measures for even a small improvement in performance—less than 25%!
As consumer expectations increasingly focus on secure mobile and online interactions, financial services (from banks and payment processers to insurers and investment services) have had to adapt.
Download our full report now to see additional informative survey results and gain a more robust and detailed analysis around crucial digital transformation trends in the financial services industry.