Financial Services: The financial services industry is one of the most IT-intensive
industries. Most of the IT services providers are concentrating their efforts
within the Run the Bank (RTB) segment, which is now challenged with budget and
margin pressure, and thus these providers are facing a challenging growth environment.
Historically, we have been present in the less crowded and more non-discretionary
Change the Bank (CTB) space, providing a wide array of services designed to
achieve growth.
In order to stay competitive in an evolving marketplace, financial institutions
need to invest in their IT architecture and change many legacy business processes.
This enables these institutions to modernize their mostly in-house developed,
vertical-specific legacy systems, which often increases the demand for managed
services in front-office IT, to introduce new technologies and processes.
We believe the following key trends drive financial institutions' IT spending:
innovation in response to digital disruption, standardization and simplification
of legacy systems, and ongoing regulatory and compliance challenges:
Innovation: The financial services industry is driven by an ongoing necessity
to innovate, especially with the recent digital transformation in the industry.
Digital transformation provides new sources of revenue and a competitive advantage.
Data-driven investment decisions, AI-powered productivity tools, Straight Through
Processing (STP), automation, and other digital initiatives all work to create
a streamlined client experience. Technologies such as big data, private cloud,
various FinTech tools and products, UI/UX, as well as less immediate technologies,
such as blockchain, machine learning, and grid computing, are becoming necessities
in the modern financial services industry. These technologies require a drive
towards off-the-shelf technology augmented by custom systems, creating a wealth
of opportunity.
The massive proliferation of data acquisition enables advances in AI and a new
paradigm in automation. Rules are not necessarily programmed into systems; Instead,
systems are taught and identify patterns and make decisions with minimal human
intervention. Machines can process data far quicker than humans, findings patterns
and triggers. This enables companies to analyze more complex data and deliver
faster, more accurate results, providing a better a chance of identifying profitable
opportunities and avoiding unknown risks.
Simplification: Banks have hundreds of applications but need to reduce the number
of applications by sun-setting some legacy items. They have a dispersion of
platforms with no centralized view by geography, product, or client. There is
a mounting need to decrease infrastructure costs and increase computing capacity,
which generates ample demand for cloud migration services to make the underlying
data cheaper to maintain, and become available quickly.
Standardization: IT infrastructure and custom trading systems built in the capital
markets over the last decades became quite massive in size and are difficult
and expensive to maintain. The banks used to spend a lot of money on creative
proprietary trading systems and efforts focused on unifying the data. At this
juncture, IT operations of most banks, especially large global banks, represent
a significant cost item and a burdensome legacy to carry. Thus, standard platforms,
such as Murex, have started receiving an increased amount of attention. The
areas of significant demand growth for standard package implementations are
Capital Markets as well as wealth and asset management divisions.
Regulatory and compliance: On-going regulatory reporting, governance and compliance
(GRC) challenges fueling consistent demand for data-related technologies, including
big data. The regulations in the fiscal year ending March 31st, 2018 that required
financial institutions to make changes to their systems were E.U.'s Markets
in Financial Instruments Directive (MIFID II), Brexit, Securities Financing
Transactions Regulation (SFTR), final minimum total loss-absorbing capacity
(TLAC) standard, General Data Protection Regulation (GDPR) and PSD.
Automotive and Transport: The rapid introduction of new electronic architecture
and the separation of hardware and its functionality and software are driving
demand for embedded software development and independent software integration
expertise inside and outside of the cockpit. The way the cars are being designed
and produced as well as the length of software development cycles are radically
changing. Inside of the cockpit infotainment and navigation, the Human Machine
Interface (HMI) features / user experience, and autonomous driving are all undergoing
continuous transformation. Outside of the cockpit the disruption spans across
all levels of automating the driving task, from ADAS (Advanced Driver Assistance
System) to HAD (Highly-Automated Driving) to fully autonomous. The capabilities
of a car receiving over-the-air updates is increasing, allowing for a shorter
time to market from design room to the end consumer. Regulation and competitive
pressure from other industries place new demands on vehicle User Experiences
and UTH control functions, as more and more autonomous driving features are
added into the vehicles.
Sharing economy, electrification of the vehicle and overall increased presence
of software in the car opens the door for relevant technologies and allows various
services related to fully digital lifestyle to come into the cars of today.
Thus, cloud- and diagnostics-related services have become a new catalyst for
growth and IT expenditures, in this sector. Furthermore, IT expenditures in
the automotive and transport industry are also increasingly driven by improving
safety and complying with regulatory requirements. Ensuring safety and limiting
driver distraction while improving the in-car experience is remaining one of
the key priorities of OEMs and their immediate suppliers.
Digital Enterprise: Consumers of today choose providers of goods and services
based on convenience, speed of service, ease of use and quality of their experiences
with desired goods and services. Digitalization is becoming an important way
to differentiate, become more efficient, acquire new customers, and improve
our clients' output. Data is becoming a valuable source of intelligence, effective
consumer targeting, and source for improvement of business outcomes. Our expertise
in Internet of Things ("IoT"), Big Data, Data Analytics, Artificial
Intelligence, Machine and Deep Learning ensures that we enable competitive differentiation
for our clients across all verticals.
