New technologies are upending banking and finance, often in unforeseeable ways. Financial institutions now must find better ways to deliver the services their customers expect, whether it’s money management, investing, trading, or making payments.
Data is behind all the technologies that are revolutionising finance. Whether it be blockchain, machine learning, or high-speed trading, fintech requires rapid access to huge – and ever-growing - volumes of data.
As a result, data storage has become the foundation for nearly every fintech application - without the right storage solutions, fintechs wouldn’t be able to innovate as quickly. What many don’t know is that their approach to storage may be costing them unnecessary time and money that would be better spent elsewhere.
The role of data in fintech
Fintechs need access to data for many different purposes. Whether it’s being used to refine trading algorithms, conduct more thorough market research, or provide a more personalised user experience, data is instrumental across the sector and the rate at which new data is generated from global markets, public companies, and financial institutions continues to grow. Indeed, having instant access to large troves of data (and the ability to store it securely long-term) is becoming vital to the continued functioning of many fintechs.
It would follow then that the data storage problem is becoming more pressing for fintechs. For context, the global capacity for data storage in 2007 was 281 exabytes. A recent report from IDC found that by 2025, the total amount of data stored will reach 175 zetabytes – over 600 times the entire world’s capacity in 2007. If this trend were to continue, we can expect the total amount of data stored would grow by 40% every year.
How hybrid and multi-cloud storage can help fintechs
To keep up with demand, fintechs and financial services firms must find cost-effective and secure ways to continue to store their data. An important part of this journey lies in overhauling their data storage infrastructure using hybrid cloud or multi-cloud strategies.
A hybrid cloud environment is an attractive option for fintechs that want to incorporate new cloud technologies while keeping part of their data storage infrastructure on-site. This allows fintechs to benefit from the efficiencies of cloud storage infrastructure while keeping their sensitive data on premises
A multi-cloud approach also yields many benefits for enterprise, as it allows them to use a variety of applications across multiple public cloud providers. This allows businesses to assign applications to the most effective cloud for each use case, and prevents them from getting locked in by one vendor.
Fintechs are cottoning on to these opportunities, with a recent study by 451 Research showing that more than three quarters of businesses in the financial services sector (77%) were looking to make some form of cloud platform as their primary environment in the next two years. Unlike traditional enterprises, fintechs are particularly well-positioned to embrace the cloud as they’re less encumbered by legacy technologies, which are a major hurdle for other financial services firms.
Making cloud storage affordable for fintech
Currently, the cloud storage market is dominated by the big three providers – Google, Amazon, and Microsoft. While they may provide a great service, these larger providers often have ambiguous pricing structures, annual price hikes, long-term contracts, and substantial egress fees. For evolving and scaling fintechs, this can sometimes prove too much of an administrative and financial burden.
With the average cloud budget having grown to £2m, according to a survey of decision makers across IT conducted by IDG, fintechs need an affordable solution that is suited to their specific needs. They may be better off working with a smaller provider that is cheaper, more flexible to their needs, and won’t tie them down into a long-term arrangement.
Agility is one of the biggest advantages that fintech startups have over traditional financial services firms. Along with being able to iterate and adapt what they offer their customers, fintechs also can update their processes and change their providers without too much trouble. By moving their data storage needs to the cloud, they can affordably tackle the vast troves of data they handle, make their operations more efficient, and in turn free up their teams to focus on what they do best - fintech, not data storage.