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How to fulfil the Digital Transformation Requirement in Banking

By Charles Southwood, Regional VP – Northern Europe and MEA at Denodo

There is no doubt that the financial industry is currently undergoing a massive digital transformation. In recent years, there has been an exponential boom in the amount of data and personal information that financial services (FS) institutions have access to. If used correctly, this data could unlock multiple opportunities, both in terms of revenue and customer experience initiatives.

But, before FS companies can reap the rewards, they need to be sure that they are able to both access and understand this data to stay competitive, whilst protecting their customers and also complying with industry regulations.

This is where modern technologies such as data virtualisation could help. By providing one single, logical view of all data no matter where it resides and diminishing the need for data replication, data virtualisation grants FS businesses early and high visibility and makes the digital transformation dream a reality.

Making the most of all that data

We are now in the open banking age, in which digital is the foundation of finance and data reigns supreme. With FinTech challengers disrupting incumbent institutions through the use of APIs to provide seamless data integration, there’s a real need for financial firms to revolutionise the way they deliver and utilise their own data to drive business outcomes.

With so much data generated every day – IDC predicts that global data levels will increase to 175 zettabytes by 2025, a rise of 61% – getting access to the best data management architecture will be crucial to maintaining agility and ultimately achieving success for financial firms.

Data virtualisation presents a modern approach to data integration. Unlike extract, transform and load (ETL) solutions, which replicate data, data virtualisation leaves the data in source systems, simply exposing an integrated view of all the data-to-data consumers. As business users drill down into reports, data virtualisation fetches the data in real time from the underlying source systems.

Data virtualisation proves that connecting to data is far superior to collecting it. It provides a single source of truth for all data that flows through various business systems, enabling firms to access and combine data from multiple heterogeneous sources using business logic and to present information in single views to consumers in various formats. The benefits of being able to wrangle data in this way are numerous for FS organisations. Data virtualisation can help them to improve their overall performance and efficiencies in a strategic manner, reducing costs and project cycle times and helping to enhance business decision making capabilities with real-time insights.

Those leading the way

The Johannesburg Stock Exchange (JSE) is just one financial institution to already realise the benefits of data virtualisation. The JSE maintains over 180 disparate data sources across its data landscape. Additionally, over 120 different applications need to operate in perfect harmony to ensure that there is accurate settlement. Many are small in data volumes but high in complexity, so data integration is a top priority. Previously, the data had to be sourced and integrated from a variety of heterogeneous data systems to serve the needs of the various functions. Using traditional batch-oriented ETL processes was becoming cumbersome and inefficient, and in such a high-speed trading environment, the JSE could not afford anything less than 100% accuracy, 100% of the time.

To consolidate its intricate data landscape and aggregate data in real time, the JSE implemented the Denodo Platform, a data integration and data management solution built on data virtualisation, to build a logical data layer. All of the relevant information sourced from these systems is compiled into base views. The JSE has built more than 1,700 base views on top of these data sources, which are processed by transformation rules to produce derived and interface views. The data integration layer processes about 2 billion rows a month at the JSE.

Chester Enslin, Head of IT Enterprise Integration and Software Quality Assurance at the JSE, describes the benefits: “Denodo’s data virtualisation layer enabled us to serve the real-time data needs of our business. Since implementing the platform, we have been able to provide 100% accurate data, 100% of the time for our various functions, particularly post-trade settlements.”

As the digital transformation of banking continues apace, organisations must look to leverage data management architectures such as data virtualisation to enable the insight that spurs the key requirements of agility and speed to stay ahead of the competition. The demonstrable ability of data virtualisation to generate considerable return on investment (ROI) is not to be ignored amidst a financial landscape where the margin between success and failure has never been thinner. The message for financial leaders is clear: data virtualisation is key to fulfilling the digital transformation in banking.

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