The recent “Great Recession” has caused turmoil across the country for consumers and businesses alike. The financial services industry has been especially hard-hit. Although financial institutions deal with recurring industry issues every year, they now operate in a new economic context after the financial crisis.
Some of the issues financial institutions face today include:
- Promoting growth and sustaining profitability in an environment with low interest rates
- Rebuilding asset quality and strengthening capital positions
- Developing new and reliable sources of revenue
- Increasing the business value of customer relationships, especially when customers have become more demanding
- Restoring public confidence in the industry
- Competing with aggressive, innovative non-traditional competitors
- Incorporating a risk management culture into daily operations
On top of these challenges, financial institutions must deal with regulatory issues, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act. In the aftermath of the financial crisis, regulators continue to implement risk management reforms, like Dodd-Frank, that are designed to create greater transparency and stability in the global banking system. This new environment changes how financial institutions run their businesses and especially how they measure and manage risk.
Technology can help banks and other financial institutions address these industry issues. However, keeping up with technological innovation presents a challenge by itself. According to a PwC CEO Survey, nearly 60% of industry leaders view the speed of technological change as a threat to their growth prospects.
The rapid shift in technology and customer expectations require financial institutions to address projects such as:
- Mobile Banking – Financial institutions have to develop and implement new digital delivery strategies to remain competitive. At a minimum, they must incorporate mobile banking as a regular delivery channel.
- Next-Generation Platforms – Many financial institutions rely on legacy systems to conduct operations. To address the issues facing the industry, financial institutions need to quickly migrate their old technology architectures to next-generation capabilities. Viewing new technology as a strategic growth investment rather than an operational expense will demonstrate the value of IT systems throughout an organization.
- Cyber Security – The PwC CEO Survey found more than 70% of industry leaders believe cyber insecurity is a threat to growth. The ongoing news reports of data breaches at retailers highlight the danger all businesses face.
CyrusOne’s colocation solutions are designed to accommodate the diverse requirements of financial institutions and help provide a strong foundation for industry challenges.