• Mark Stavrou, CEO and Co-founder at Trustgrid


• 01.05.2020 06:45 am
COVID-19

As industries begin to assess the fallout from COVID-19, it’s almost certain that a global recession is on the horizon. The director of the International Monetary Fund (IMF) recently stated that the world economy is taking a substantial hit and “global growth will turn sharply negative in 2020.” In the U.S., the Fed announced provisions of up to $2.3 trillion in loans to support the economy.

Like many businesses, fintechs will be feeling the pressures of an economic recession and discussing where to cut costs while maintaining a high quality of service and a robust critical infrastructure.

However, prior to the pandemic, many fintechs had already begun this conversation as they considered moving to the cloud. In addition to the scalability, flexibility and availability that cloud computing offers, lower IT operational costs and better disaster preparedness are primary benefits for application providers that make the switch.

The evolution of application architectures in the cloud has also spurred fintech providers to consider completing their infrastructure update by adopting next generation connectivity solutions, such as data mesh.

A data mesh not only alleviates issues that arise from the need to access and manage data, but similar to a cloud migration, also greatly reduces operating costs compared to legacy solutions. With the power to slash connectivity costs by as much as 50%, a data mesh can deliver immediate and lasting cost reduction to application providers.

Establishing a fabric of connectivity

Centralized fintech applications rely on connections to core banking data that is located remotely and controlled by financial institutions. The management of these connections becomes increasingly complex as the number of connected institutions grow.

Stitching together data held across multiple data centers, a data mesh creates a layer of connectivity that abstracts away the complexities of connecting, managing and supporting access to data. A data mesh architecture helps application providers achieve operational efficiencies by including automated security and compliance features, while also offering improvements in performance and data availability.

Yet, it’s the cost savings of replacing VPN and MPLS that remains the biggest justification for implementing a data mesh.

Deployments

Connecting to data sources that are owned and controlled by a financial institution creates barriers to a quick and easy deployment, as dispatching costly technicians is not a scalable option and relying on a customer’s onsite technician can delay deployments.

A data mesh shrinks the costs of deploying new connections. New connections can be enabled through one-touch deployments via pre-configured, low-cost hardware appliances that are shipped onsite, or deployed remotely through virtual appliances installed on pre-existing servers or cloud environments.

Hardware and software

Legacy networking vendors require the use of their high-priced gear while also charging significant maintenance and support fees. In contrast, a data mesh is software-defined, making hardware optional. This dramatically reduces the costs of networking and provides a number of improved features, like containerized applications running on network nodes that legacy networking vendors are simply not able to provide.

Centralized orchestration

To run smoothly, most networking technology demands regular maintenance, updates and support. This gets pricey, especially when application providers are challenged by the lack of control over both sides of a connection. 

A data mesh’s centralized configuration and management of data connections minimizes costs. This becomes increasingly important in scaling connectivity as each new deployment adds to overall complexity and expense.

Removing dedicated circuits

Dedicated circuits, such as MPLS or AWS Direct Connect, can cost hundreds or thousands of dollars each month per site. A data mesh eliminates these costs while still ensuring the same availability and performance by replacing dedicated circuits with software.

Using existing internet connections configured in redundant pairs, a data mesh reinforces high availability (HA) by automatically switching to a back-up without manual interference or downtime if one connection fails. For critical connections expected to be ‘always on,’ automated failover function guarantees 99.99% SLA uptime, which is critical for handling timely financial transactions.