• Maajid Khan Colt Technology Services , Sales director, financial and professional services at Colt Technology Services


• 05.03.2025 05:15 pm
#FutureOfFinance #AI #NaaS

Financial services organisations have faced significant disruption in recent years. In the banking space, nimble new fintechs are providing the seamless, personalised, app-based experiences that consumers increasingly expect, piling competitive pressure on traditional institutions. The democratisation of trading also means that advisers and brokers are seeing profits diminish, as people turn to trading apps instead of intermediaries. At the same time, sustainability is rising up the agenda as regulatory and consumer pressures grow for businesses to improve their ESG performance. 

The financial sector faces these challenges while fighting off the omnipresent threat of cyber crime, which has caused losses of more than $12 billion for the industry. The number of attacks is rising, and so is the potential for lost business and penalties.

AI and the financial services industry
Artificial intelligence (AI) has raised the stakes in cybersecurity, providing new tools to protect organisations while also presenting new challenges. AI offers the potential to automate and enhance cyber defences, making them more robust and efficient. It also poses risks: malicious actors can exploit AI to launch sophisticated attacks and, as AI relies on large data volumes, there is the risk of data exposure and breaches. AI and Security were most likely to be cited by Financial Services CIOs as their biggest IT investments in the next 12-24 months in research we carried out for our Digital Infrastructure report in 2023, while in our latest report more than one in two (55%) said they are using more on demand/NaaS features as AI evolves. 

Financial services firms must harness the opportunities and benefits presented by AI while preparing for scenarios where malicious actors can misuse it. The use of AI is becoming prevalent across the sector. Our research, as part of our Digital Infrastructure Report, found 91% of financial services companies were either already using generative AI or plan to in the near-future, while 90% said the same for machine learning. 87% said they were already using, or planning to use, traditional AI in their financial services firm. When we questioned survey participants on how important they felt AI is across their organisation, 46% felt traditional AI was either very important or essential, rising to 50% for machine learning and 53% for generative AI.  

AI can offer value by analysing large structured and unstructured data sets and uncovering valuable insights for clients, automating repetitive and time-consuming tasks and generating draft documents like contracts and reports. Customer chatbots, automating knowledge management and fraud detection, are just a few of the ways AI is currently being used, and many more new applications are anticipated over the coming years. 

Financial organisations are rethinking their network architecture
As firms are rolling out AI, they’re rethinking their IT networks which are foundational to staying globally connected. The growing volume of AI-related traffic places heavy demands on organisational infrastructure. Aside from bandwidth, AI has different characteristics to other types of network traffic, such as high bandwidth requirements, a need for low latency and the tendency to feature intense bursts of traffic.

A resilient, highly available network that can flexibly support business goals – such as AI adoption, an expansion into new markets and the launch of new apps and services – is a critical success factor for financial services organisations, and a differentiator among competitors.

Low latency network connectivity between applications, exchanges, locations and users is essential to support the life cycle of a trade end-to-end, from price discovery through to execution, reconciliation and clearing. A bank trading on the foreign exchange market, for example, needs immensely fast response times when checking currency prices in London, New York and Hong Kong, as latency affects the performance of the trade.

Network-as-a-Service provides a more agile service model
Network as a Service, or NaaS, takes the cloud model and extends it to the network, allowing organisations to ‘rent’ network services on demand. 90% of the financial services CIOs we spoke to for our Digital Infrastructure report are either already using, or plan to use, network as a service across their infrastructure. 

Unlike traditional telco models, which may take months to provision, NaaS connections can be delivered immediately where capacity is available. Bandwidth can also be dynamically scaled up and down at short notice according to the needs of the business. NaaS offers self-service capabilities, allowing businesses to build and manage bespoke global networks end-to-end through a digital platform.

As the needs of financial services organisations change, NaaS allows the network to evolve swiftly in response. Bandwidth can be flexed and connections to new locations and resources can be up and running in minutes, as opposed to the four or five weeks that are typical lead times for traditional network services.

That means whenever an organisation makes an investment – in a new site, for example, or a new cloud service, or when a new app or service is developed – it can be connected and generating income almost immediately. As network traffic grows, NaaS also allows organisations to continue harnessing new technologies like AI without the network becoming a bottleneck.

NaaS offers more than just flexibility, however. It also provides the visibility and control to manage the routes that data takes between two points, which is important in meeting increasingly onerous regulation and compliance requirements. With NaaS, the service provider manages the entire network. This means that hardware, software and security patches are kept up to date and potential vulnerabilities are minimised. Also, with a single provider for networking and security solutions like firewalls and DDoS mitigation, the two can be more tightly integrated.

As a shared infrastructure with software-driven functions, NaaS is much more efficient in its power usage compared to traditional telecoms models. It also avoids the carbon emissions generated by installing and provisioning ‘just in case’ bandwidth that may never be consumed. In fact, 81% of Financial Services respondents in our latest Digital Infrastructure report said that Network as a Service is actually helping them meet their sustainability goals. 

As the financial industry begins to architect its sustainable network of the future to meet its customers’ changing behaviours and evolving demands, it’s not difficult to see why flexible technologies like NaaS are experiencing growth, and will do in the months and years to come.