What’s Driving DBaaS Adoption in FSI

  • Rowen Grierson, Senior Director and General Manager UK&I at Nutanix

  • 05.04.2023 07:24 am

1. The financial sector is cited as one of the largest markets for companies operating in the database technology sector. What is it about the banking and financial markets that drives database technology adoption?

Databases are the foundation of core banking systems given that banks process millions of transactions per day. Databases ensure the transactions are recorded accurately and that accounts are always up-to-date. Without databases, there is no modern financial services and banking as we know it. In addition, like other sectors, FSI and banks today compete largely based on how well and how fast they can build and deliver new, innovative, digital services to their customers. Those services require robust databases to power transactions and other features.

2. What is Database as a Service/DBaaS and how does it help firms tackle the explosion in data and manage the large variety of data types they need to support?

As for the explosion in data volume and increase in data variety, the result is banks and financial services companies must run more databases today and a larger variety of databases than ever before. This adds enormous operational complexity to already overtaxed DBAs, which increases risk of database failure (poor performance, lack of availability, out of compliance), which has a direct impact on the customer experience. Databases are also important in modern application development, but traditional database management processes don’t align well to agile, iterative development. DBaaS helps both by simplifying database management through automation of administration tasks, thereby reducing risk and freeing up DBAs to work on higher-value tasks. It can accelerate software development by enabling developers to self-service deploy databases in a fraction of the time possible now.

3. What role does automation play in streamlining data management?

Automation allows DBAs access to more and more databases and to do so in a consistent, secure way. With DBaaS and automation, operational and security best practices are applied consistently across all databases, while reducing the manual administrative burden on DBAs. They can then focus on higher-value activities like optimising database architecture and performance.

4. How does DBaaS help financial institutions comply with ever-changing industry regulations?

DBaaS enables security and compliance best practices to be built into the deployment and management of all databases, rather than relying on overtaxed DBAs to try to do so manually across large fleets of databases. Inevitably, without DBaaS and automation, some will fall through the cracks, leaving banks open to compliance breaches.

5. What role does hybrid cloud play in supporting the efficiencies DBaaS can deliver and why is it so important that financial services organisations can run their data across a mix of on-premises, private and public cloud environments?

The reality is that banks, just like all other companies across sectors, are implementing hybrid multicloud strategies. They want to deploy their applications and databases in the best operational environment depending on the characteristics of the workload. In some countries, banks may be required to run apps and databases locally to meet compliance requirements, making private cloud the better option. For other apps and databases, they may want to run them on one or another of the public clouds to take advantage of, for example, that public cloud’s AI services. The result is banks are going to run their databases across multiple environments - private cloud, public cloud, colo, and edge locations - which again adds enormous operational complexity. A true hybrid multicloud DBaaS removes the complexity by providing a single control plane to manage the complete lifecycle of all databases, no matter where they are running.

6. What does the future hold for DBaaS in FSI and what trends are you seeing as the market grows?

The trend is hybrid multicloud. FSI is going to run workloads, including databases, across multiple operating environments. This is extremely complex to manage, especially when we’re talking about national and multinational banks and financial institutions with millions of customers across multiple lines of business. So I think we are going to see a dramatic increase in DBaaS adoption among FSI to simplify their complexity, to reduce their operational and security risk, and to make databases a more seamless part of application development so they can get new, innovative digital services to market faster.

7. What business benefits are financial organisations achieving through DBaaS when it relates to either cost reduction or time to market?

We’ve seen some of our customers in the FSI space dramatically reduce their time-to-market for new software products and services. In some cases, it took days or even weeks for developers to get access to databases and, therefore, longer to get new apps and features to their customers. They are now able to use self-service to deploy databases in minutes. In terms of cost reductions, DBaaS can help transition from expensive proprietary databases to open-source databases. With DBaaS, it's possible to get near the same level of performance, availability, etc. with open-source databases as with commercial databases.

8. There is obviously a wide-range of database engines in the market, which ones do you see financial services adopting and is there a change in modern databases that are used by these organisations from 20 years ago?

Absolutely. Twenty years ago, pretty much every bank standardised on one of a handful of proprietary relational databases. Banks were either an Oracle shop or a SQL Server shop. Today, while there are still plenty of Oracle and SQL Servers in use supporting existing applications, banks and other FSIs are increasingly turning to open-source databases to support new, modern applications. PostgreSQL, an open-source relational database, is particularly popular for transactional workloads. MongoDB, an open-source non-relational database, is also very popular with developers building modern applications.

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