The banking, finance, service, and insurance (BFSI) industry has been among the primary end-users of IT products. Whether launching mobile banking (M-banking), enhancing customers’ savings hygiene, or offering doorstep services, financial institutions have never shied away from tech-driven innovations.
Ironically, that has not been the case with Desktop as a Service (DaaS) until the past few months. Considering the recent tectonic shifts challenger banks have undergone, BFSI incumbents have slipped under immense pressure. Cutting-edge virtualization solutions have enabled early adopters to eat away at the market share of traditional banks. Additionally, COVID-19 has underscored that customers expect banking services at their fingertips.
Hence, financial service providers are making rapid but cautious moves toward DaaS solutions to address these critical challenges in the banking industry.
Whether managing funds or offering investment suggestions, financial institutions deliver multiple services to customers. The very nature of these services makes the industry ideal for utilizing DaaS solutions.
The data they handle envelopes personal identifiable information (PII), which is highly confidential and demands stringent regulations. Moreover, customers are scattered across continents, and bankers need technological nimbleness to serve them on an as-needed basis.
The conventional on-site systems cannot deal with these evolving business requirements. As a result, financial institutions are increasingly betting on DaaS solutions that deliver on the promises of better performance, security, and cost-efficacy.
This article discusses why DaaS is a go-to solution to address the challenges in finance.
Securing Data at the Endpoints
Financial institutions store and process tons of classified customer information on a regular basis. From contact details to banking details, this gold mine of PII makes any banker an appealing target to cybercriminals. Moreover, the BFSI vertical is witnessing an upsurge in users preferring financial technology (FinTech) apps, such as M-banking and electronic payments, to traditional banking methods.
However, this expansion brings with it an astonishingly complex matrix of exposures and threats. Banks alone endured about 2,500 cyberattacks in 2021, a massive 3.5X rise from the 2020 numbers.
Besides, new security challenges in finance crop up with the pervasiveness of remote working culture. Bankers now access corporate systems and data from home routers, public Wi-Fi, and personal devices – otherwise called bring your own device (BYOD).
Virtual desktops do not keep or process any critical information. Instead, it resides in companies’ servers and data centers, where it is highly secure. When financial institutions include DaaS in their BYOD architecture, employees and users no longer have to use personal devices to log in and consume data.
Rather, each personal device turns into a window to virtual applications. These virtual desktops mimic a sandboxed, segmented work setting that exists safely beside users’ personal applications. This separation of apps from endpoints enables banks’ IT teams to manage and monitor data security, access, and auditing.
Changing System Configurations on Request
Over the past decade, the basic needs and preferences of an average consumer changed drastically no matter the industry. Now, quick service and convenience are among the deciding factors in client satisfaction.
BFSI incumbents’ core legacy systems are technologically inept at keeping pace with the ever-changing customer demands and market dynamics. These on-prem systems have a rigid configuration and need to be replaced as finance organizations mature.
DaaS solutions offer flexible desktops which are instantly scalable. As desktops are virtual, bankers can set their configurations based on business objectives. Their IT teams can add or remove users or system resources after completing the tasks.
Optimizing IT Budgets
Financial institutions allocate the lion’s share of their budgets for IT infrastructure. First, they purchase physical workstations from a vendor. Then, they need electricity and adequate air conditioning to run these systems. Not to mention a skilled, dedicated IT staff required for maintenance purposes. All these steps pose serious challenges in finance in terms of time and cost.
Virtualizing BFSI assets enables banks to move from capital expenses (CAPEX) to predictable operating expenses (OPEX). Many established DaaS vendors provide an entire stack for a per-user, per-month subscription price.
This pay-as-you-go model allows banks to foot only for tools, virtual desktops, and resources they are currently using. In addition, they can scale up and down as needed while having an expert IT panel to keep their workstations updated and protected 24/7.
When the time comes for a system refresh, financial service providers can buy thin clients, which are comparatively cost-effective, versus physical desktops that are compute- and energy-intensive.
Further, financial establishments can set up a BYOD policy, where bankers can serve customers from their own devices. As they do not have to deploy these systems on-premise, organizations save on maintenance-related costs.
Minimal Downtime during Unforeseen Events
Any minor issue with local workstations can trigger a halt in financial operations for a few hours. Even worse, a major devastating event, such as an earthquake or a large-scale cyberattack, can extend the standstill for days (if not months).
Several DaaS packages come with a foolproof disaster recovery (DR) plan to ensure uninterrupted operations in financial settings, even when a catastrophe occurs. DaaS replicates the entire financial process on multiple data centers situated across the globe.
The virtual resources remain highly available, and IT admins can reconfigure secure access to systems if a location is out of order. So, if one server or data center crashes due to any unexpected event, VDI’s at-length redundancy and backup capabilities redirect bankers’ access to identical workstations.
Moreover, if any employee loses their devices or leaves them somewhere, the risks of data theft/loss are nil. Virtual desktops are not tied to any specific device. This geographical separation of servers minimizes the risk of operational standstills in financial institutions and thus ensures a smooth client experience.
Keeping Regulators Happy
Effective corporate administration and solid risk management boost the financial stability that banks can achieve by collaborating with market actors and policymakers.
Considering the sensitivity of the information financial institutions preserve, they are always under pressure to fulfill security mandates, including the Payment Card Industry Data Security Standard (PCI DSS). Non-abidance to such BFSI norms can result in swift, silent, and brutal outcomes.
Many such compliance standards are already hovering around the corner as different countries lock down their “digital boundaries” in their own way. Case in point, the European Union’s (EU) General Data Protection Regulation (GDPR). This banking regulation requires banks to comprehensively examine their offerings to assess and correct any possible security leaks and confirm whether the firm is EU-native or not.
DaaS helps financial establishments to stay compliant with technical standards and ease regulatory pressure. After all, teaming up with a service provider versed in the BFSI sector and having the necessary certifications makes the regulatory landscape significantly more negotiable. Furthermore, vendors offer compliant VDI tools, summarized in service level agreements (SLA) and data center compliance norms.
Serving Clients in Various Time Zones
Money makes the world go round. Providing financial services to global customers involves resolving their queries at anytime from anywhere. Today, customers are tech-savvy and make transactions online. They expect their service providers to respond equally fast.
As such, financial service firms must be flexible and agile enough to fulfill the demands of their “always-on” clients. Bankers have to sit behind a desk the entire day while working on traditional desktops. Once they log out, catering to customers living in the other hemisphere becomes a grave challenge in the banking industry.
Accessible from any Internet-powered device, anywhere, anytime, DaaS solutions enable finance experts to attend to customers residing across regions, whether on the road, at the office, or at home. At the same time, they can access financial applications and data on the go.
Unleashing DaaS to Tackle the Challenges in Banking Industry
A bank’s tech expertise and the quality of banking software services it receives linearly affect its market competitiveness.
DaaS solutions are transforming the way financial establishments perceive operational functionality and risk processing. They have reinvented the groundwork of the BFSI space by turning conventional desk-side firms into web-delivered service providers. Hence, bankers can focus on expanding their clientele and strengthening their infrastructure.
In general, banks have been sluggish in leveraging DaaS solutions due to security and compliance concerns. However, recently, they have started to fully explore the potential and realize the benefits of desktop virtualization technology.
Desktop as a Service houses tremendous value potential when it comes to combating the challenges in the banking industry. Unfortunately, those with a piecemeal migration strategy can miss out on grabbing the entire value. For instance, companies first to cash in on M-banking have already become industry heavyweights.
Thankfully, financial institutions are quickly learning that BFSI’s future lies in virtualization. As a result, they are increasingly including DaaS in their digitization journeys to remain relevant, bolster IT security, and offer more diverse services to customers.