Is Digital Enterprise and Autonomous IT the Future of the Financial Sector?

We examine how COVID-19 is impacting the Financial Services Industry

Rearchitecting and thinking about how to build an Autonomous IT infrastructure that can function, manage and heal itself during a pandemic like this will be absolutely necessary for future resilience.

The COVID-19 pandemic has brought enormous disruption to many industries, with some proving to be far more resilient than others. With closures of offices and shops and social distancing measures in place for the foreseeable future, organisations around the world are having to completely rethink the way they do business now and in future.

For the Financial Services Industry (FSI), there will be some significant changes ahead, with automation likely to emerge as a key trend. Across many sectors, digital enterprise is supported by some form of business process automation. And in FSI businesses, automation is already used to a significant extent, most commonly in the form of Robotic Process Automation (RPA). But now, automation is set to play a much larger role in the FSI sector – supporting a remote workforce with Autonomous IT.

After many years of talk and debate, the digital workforce is now very much a reality in 2020. Think about digital collaboration – video conferencing is the new normal as meeting rooms all over the globe lie empty. And fewer locational constraints mean people can – and do – work from anywhere. A recent Finextra* article headlined “The WFH hub is here to stay” cited the example of Australian bank and financial services provider Westpac* who moved its 22,000 workforce home “within days” and now describe working from home as a “viable third and important part of our workplace strategy.” Danske Bank* have done something similar with its 19,000 staff and say the transition will have a "lasting impact on how work is structured and conducted.”

In order to support the digital workforce, financial institutions will increasingly be looking at how they can incorporate automation into their IT infrastructure. "This concept of Autonomous IT means that the infrastructure can run, repair and heal itself much more quickly than traditional infrastructure thanks to built-in automation capabilities,” said Parviz Peiravi, Global CTO/Principal Engineer, Financial Services Industry at Intel. "What's more, it can be remotely managed, without the need for IT teams to be on site.”

Currently, resources are often distributed across the globe so that even if there is a disruptive event, such as an earthquake, in one location, work can be continued at offices in other areas and countries. However, when the disruptive incident is worldwide, such as a global pandemic, this approach fails, particularly in countries where remote access capabilities are limited. Although still in its early days, Autonomous IT could be the answer.

A prime example of this is Trade Finance. The World Trade Organization* estimates that up to 80%1 of the world’s trade relies on trade finance. Operations require a significant number of physically located personnel to process a largely paper based workflow relying on hand to hand and omni-present finance staff to review and approve documentation. This became unrealistic during COVID-19 as staff were forced to work from a variety of locations during the pandemic thus slowing and sometimes halting the trade Finance chain. The reliance on longer and more global supply chains makes even the world’s largest companies vulnerable to the weakest link in the chain.

The impact of COVID-19 on Trade Finance will force banks to digitise where possible and embrace Digital Trade Finance. Today technologies like blockchain are already used to simplify trade practices and replace manual and paper-intensive processes in trade finance. One example is Marco Polo*, the joint undertaking between R3* and TradeIX*, a global network focused on open account financing offered through a distributed trade finance platform. By connecting a critical mass of numerous parties in the trade ecosystem, it gives the much-needed digitalisation of trade finance a real possibility. Post COVID-19 we anticipate an acceleration in the journey towards machine-to-machine trade finance and expect to see many corporates, banks and third-party service providers catch up and move to mass adoption in one of the largest global financial markets.

"Rearchitecting and thinking about how to build an Autonomous IT infrastructure that can function, manage and heal itself during a pandemic like this will be absolutely necessary for future resilience," said Peiravi.

While there is already a certain level of automation in place in the financial sector, humans are still involved in the loop. You might call it Autonomous IT with human supervision – if a virtual human can connect and act virtually from any part of the world it means that physical humans can be freed up to focus on other tasks. This allows organisations to build an infrastructure that is as resilient as possible.

To support the Autonomous IT concept, we need to place the emphasis on standardisation, automation and embedded intelligence at scale. Any aspect of the infrastructure design must support those core principles, from end user access to application development to IT operation. For example, the VPNs that were developed to support a few thousand or maybe tens of thousands of FSI employees are now having to support numbers closer to 200,000 following the sudden move to widespread home working. This kind of rapid scaling is a major challenge.

The need to build scalable Autonomous IT infrastructure will accelerate the adoption of AIOps, a term originally coined by Gartner2. AIOps involves using AI to analyse, realise and act on IT operations, enabling automation of IT processes and system management. 

"Just as automation and robotics has transformed the manufacturing industry, increased automation in IT will reshape the future of the corporate environment and the skill set of the workforce," said Peiravi. "With these capabilities, people don't necessarily have to go to the office anymore, so the workforce does not have to be location-specific. The domino effect caused by COVID-19 is creating a totally different environment that will be culturally and organisationally different and help open the door for more innovation."

For FSI businesses to implement Autonomous IT, they must have the right approach and processes in place, and this is where DevOps, CI/CD (Continuous Integration/Continuous Delivery), SecOps, DataOps and ModelOps are becoming an integrated part of the IT system. In addition, the Hybrid Multi-Cloud concept delivers the scalability, flexibility and resilience required to support work from anywhere, at any time, and with any device.

As well as having a major impact on the design of IT infrastructure in the future, the current pandemic has also affected the financial sector in other ways. With people going out less and worrying more about their cashflow, mobile banking apps have become increasingly popular. In fact, some 6 million people in the UK downloaded their bank's mobile app for the first time during the early weeks of the country's COVID-19 lockdown3. With more people adopting banking apps, this is likely to increase the usage of API and accelerate the Open Banking concept.

Paying by contactless card and mobile phone is already commonplace and has been accelerated by COVID-19 as people avoid using physical cash and the potential infection risk that goes with it. For example, a recent FT* article highlighted that ATM cash transactions in the UK have decreased from 50m (volume) in April/May 2019 to 23 million in April/May 2020. As a result we are set to see a rise in digital currencies or similar technologies. With this in mind, Intel has developed hardware and software capabilities that enable the development of applications such as digital currencies based on Blockchain technologies and is actively working with open source communities such as Hyperledger* and software vendors such as R3 and system integrator Accenture*.

As well as having a major impact on the way we work in the short term, COVID-19 is set to spark an accelerated shift to digital and adoption of new technologies among FSI businesses. While this shift will be experienced in a number of ways, the move from digital IT to digital workforce is set to be the big trend to watch in the coming months and years.

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1World Trade Organization: Trade Finance and SME’s  https://www.wto.org/english/res_e/booksp_e/tradefinsme_e.pdf
3Six Million People Download Their Bank’s App For The First Time During Coronavirus Lockdown: https://blog.nucoro.com/nucoro-research-six-million-people-download-banks-app