In spite of diligent digital transformation efforts, most financial services institutions
still support a loose patchwork of siloed systems and repositories. These dis-integrated resources are “data platforms” in name only: in addition to their high maintenance costs, their lack of interoperability with other critical systems makes it difficult to respond to business change.
The stringent requirements imposed by regulatory compliance, coupled with the proprietary nature of most legacy systems, make it all but impossible to consolidate these resources onto a data platform hosted in the public cloud. To modernize and integrate this patchwork of systems and data sets, financial services institutions must adopt a modern, hybrid data platform based on open-source technologies and open standards.
A hybrid data platform can coexist seamlessly with an institution’s legacy systems, enhancing its data operations, and enabling it to take a phased approach to digital transformation.
The top-line benefits of a hybrid data platform include:
Technical debt attaches itself like barnacles to legacy systems making a hybrid platform the only viable solution for most financial institutions. Legacy systems are usually too outmoded—or, in the case of proprietary, black-box systems, too poorly understood—to migrate to the cloud.
In the same way, a confusing assortment of regulatory requirements prevents financial services institutions from moving sensitive data and operations to public cloud infrastructure. For these sensitive workloads and data sets, a hybrid data platform gives organizations a way to balance the needs of compliance with the necessity to innovate and modernize. And by leveraging open-source technologies and adhering to open standards, a hybrid data platform minimizes the creation of new technical debt, offloading the lion’s share of maintenance to a thriving open-source ecosystem. Instead of paying down technical debt, focus can be placed on identifying new use cases for predictive analytics and machine learning (ML), embedding advanced analytics into operational workflows, and developing new products and services.
With a predicted uptick in merger and acquisition (M&A) activity, a hybrid platform is both a tactical and a strategic asset. By permitting a holistic view of data, automating core data management and data integration tasks, and simplifying data governance and data security, a hybrid platform helps facilitate the seamless merging of dissimilar systems and processes—a daunting task in any M&A scenario.
The reality is that merging the operations of two or more financial institutions of significant size and maturity entails the redesign of enterprise architecture. It involves not just integrating applications, workloads, and data across disparate systems, but exploring, mapping, and reconciling dissimilar business processes. Because a hybrid platform exposes a common set of built-in features, functions, and interfaces, financial services institutions can use it to design reliable, resilient workflows that integrate services, workloads, and data across dissimilar systems or processes.
Financial institutions can design, build, test, and launch their own hybrid data platforms—or adopt a best-in-class solution like Cloudera Data Platform (CDP), which is based on open-source technologies and open standards.
Building a bespoke data platform, hybrid or otherwise, means taking on significant new technical debt, and also entails a not-insignificant long-term risk, requiring extensive customization of open-source technologies to underpin its bespoke data platform, as well as incur responsibility for the long-term maintenance of these customizations.
In addition, financial services institutions must design, implement, and maintain any necessary features that the upstream open-source technologies lack. Today, no combination of open-source technologies approximate’s CDP’s built-in capabilities for automating tasks like data profiling, data cleansing, and data integration. Nor do extant open-source technologies replicate CDP’s transparent data federation capabilities, rich data governance feature set, or robust security controls.
With CDP, financial services institutions get the benefit of tens of millions of dollars in intellectual property investment—without the associated upfront cost, residual technical debt, or long-term risk.
Learn more about CDP and how Cloudera supports Financial Services Modernization.
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