The fintech revolution is here, and making its mark on the world. From mobile banking, to blockchain technology, machine learning and artificial intelligence, banks worldwide are investing in innovative technologies that allow customers to access their money anywhere, anytime – safely. Fintech has even made its way to Toronto, home to the Canadian banking headquarters and corporate offices for the “top five” banks in the country.
Geoff Ois, the director of sales and leasing for DFT Data Centers in the Greater Toronto Area (GTA) was recently interviewed in a series on From the Racks, to talk about how the fintech revolution is changing Toronto. As he says, fintech gives customers “unprecedented access to their money and financial services. It allows flexibility, enabling customers to do their financial planning from anywhere and at any time via their phones and other mobile devices.”
In the second part of Geoff’s interview, he talks about some of the challenges that fintech is placing on data centers and IT infrastructures in Toronto. Here is the rest of Geoff’s interview with From the Racks.
From the Racks (FTR): What challenges are the large financial services companies facing when it comes to embracing and adopting new fintech solutions? What impact is it having on their IT infrastructure and data centers?
Geoff Ois: For the organizations looking to innovate their own fintech applications, it means bringing on developers and other technologists that can design, develop, test and implement new technologies for their customers and their business.
Developers need test environments in which to design new applications and to properly examine and assess them. These things all require compute and storage resources. And this means more data center space.
Then, if new fintech applications meet their expectations, they’re going to want to bring them to market. This also means more data center space since those applications will need to be hosted somewhere, and will need the compute and storage to run.
(FTR): Are these organizations prepared for this wave of innovation? Are their data centers, IT infrastructures and networks ready to embrace and fully utilize these new technologies?
(GO): It’s definitely going to be a challenge. The pace of fintech innovation is moving so fast that everything is constantly shifting. They’re preparing their IT infrastructure while the goalposts keep moving.
(FTR): What do they have to do, and what do they need to start thinking about to get themselves ready for a fintech revolution?
(GO): There are a few considerations for these big banks as they continue to innovate and introduce new fintech solutions. First, they need to think about the scalability of their resources. They need to think about geography and physical location of their IT resources. Finally, they need to think about time to market and time to provision.
As these new fintech solutions are developed, tested and implemented, banks need new data center space for dev and test environments, and to host these solutions when they’re brought to market. For that, these banks are increasingly turning to leased data center space to meet their security requirements and remain in control of their IT infrastructure.
The one thing that they can outsource is the actual, physical data center. Having the flexibility to grow in a space and the ability to have space on demand is essential with everything moving so quickly. It’s easily audited and easily outsourced. It’s a flexible and readily available environment that they wouldn’t have if they build it themselves.
Then they have to think of the speed of processes. Many financial transactions are time sensitive and lag can be a real issue. If they’re planning on rolling out fintech solutions to multiple, disparate geographies, they’re most likely going to want data centers in those markets – close to the edge – to decrease lag and ensure that all processes and requests are handled in a timely fashion.
This is another area where colocation and leased data center space can help, since it would be simply impractical to try and build a new data center in every physical market where a new fintech solution is being rolled out.
Finally, there’s the issue of time to market and time to provision. If a new technology is available, and a bank wants to bring it to their customers in a timely fashion, they’re going to be slowed by the need to design and build a new data center to host it. That’s a process that can take years. The risk is competitors beating them to market with alternative fintech solutions.
Data center outsourcing is a solution here as well. By leasing space, companies can have their infrastructure operational in weeks or months – speeding the time to market and ensuring that advanced fintech solutions are in use as soon as possible.
Click here to read Part 1 of this discussion, “How Canada’s Big Five Banks are Playing a Key Role in the Fintech Revolution.”