Gartner predicts that by 2025, 80% of enterprises will shut down their traditional data centres. Indeed, 10% of organizations already have. This does not necessarily mean everything is going to the cloud, but IT leaders do need to start thinking about where current and future workloads will live based on business reasons (e.g. client engagement, GDPR regulations), not technology reasons. Gartner itself said: “Organizations need to create an environment that houses more agile infrastructure both on-premises and in the cloud, the critical time frame for which is 2021 to 2025”.
In today’s fast-paced, highly digital business world, the need to quickly respond to changing market conditions and offerings creates a multitude of challenges for banks and wealth managers.
Underlying IT platforms not only need to be able to scale depending on workload, they must also be able to seamlessly integrate with third-party applications. This also includes contract management of software vendors with the responsibility and expenses of managing and monitoring all the possible technical components and issues that are associated with the software.
Managing this increasing complexity and cost of a best-in-class IT infrastructure becomes a distractor for financial institutions that would like to focus on their clients and service offering. Different financial institutions have differing requirements when it comes to outsourcing infrastructure operational needs. The requirements range from pure infrastructure components (infrastructure as a service (IaaS)) to higher levels of services, which encompasses also databases and middleware components (platform as a service (PaaS)). Next levels would include the full set of supporting components or even the full banking suite in its entirety (software as a service (SaaS)).
A trusted partner is therefore required to understand an institution’s needs while also having an in-depth understanding of IT landscape management and financial industry application knowledge.
This is beneficial because your company will not be responsible for the software updates, server maintenance, data backups, disaster recovery, and so on. The system is typically available quicker without the need of IT intervention for the provisioning and/or ongoing maintenance.
Avaloq’s vision for our clients is to also provide infrastructure and platform services to enable a faster transition to SaaS services, reduce the burden on clients of undergoing a full transformation and alleviate their worry about the numerous activities required to operate the underlying platforms.
Part of this strategy and transformation at Avaloq is that we’re standardizing and automating its platform services and offerings. Internally we are structuring the services across clearly defined boundaries and functional capabilities following well-known industry standards, best practices and concepts.
The individual layers are as follows:
SaaS is a software distribution model in which a third-party provider hosts applications and makes them available to clients over the internet.
PaaS is a type of cloud service that provides a platform allowing clients to develop, run and manage applications without the complexity of building and maintaining the infrastructure typically associated with developing and launching an application.
IaaS is a form of cloud computing that provides virtualized computing, storage or network (CNS) resources.
Market trends clearly indicate that infrastructure platform outsourcing is an initial step, but achieving full independence from IT-related aspects will allow banks to gain momentum.
With our software as a service (SaaS), we free clients of all tasks relating to IT operations by providing all IT-related ITOaaS services whole also taking care of software and platform management. Avaloq is responsible for running the banking IT and thus allows our clients to turn all their attention to providing best-in-class advice to their clients.
With IT operations as a service (ITOaaS), Avaloq is offering a new solution to our clients that includes IaaS and PaaS services enhanced with further monitoring and supporting components. This service allows banks to benefit from a lower entry point into the Avaloq Financial Cloud. It enables them to bring their own banking suite and any other surrounding software components onto it without a major re-write or initial investment efforts.
Avaloq is perfectly positioned to act as the trusted partner. As a core banking platform provider operating numerous banks on our platform, we combine in-depth financial services and IT knowledge with the necessary technical platform skills and the ability to provide our clients with cost-efficient platforms.
As a market-leading SaaS and BPaaS service provider, Avaloq offers top-quality services for the financial services sector and reduces the burden on clients of dealing with regulators and auditors, while enabling them to benefit from the advantages offered by the cloud.
Our solutions are preconfigured with industry-standard processes and components. In addition to our own leading software, our SaaS offering includes a rich mix of optional third-party add-ons, such as regulatory reporting and pricing and asset data feeds to ensure rapid time to market. With all this and a vast range of specialized third-party solutions, available via our ecosystem, you can shape your system to dovetail precisely with your business needs and your clients’ specific requirements.
We’ll take care of all technical life-cycle management activities like keeping hardware and software up to date and providing enough capacity to flawlessly run the banking operations. We’ll also ensure that all the necessary security measures are in place, updated and monitored.
Avaloq is pioneering the new era of Open Banking by providing our interfaces and the shift to microservices that will allow clients to make use of our newly developed services in any environment. Clients can already avail themselves of microservices such as our regulatory Payment Services Directive (PSD2) module.
The next six months
Avaloq is aiming to identify the specific needs of our clients and reshape our software as a service (SaaS) offering to benefit our clients even more.
We’ll make our application development environment available to our clients as a new service offering (ADAIaaS). This will allow clients that use our core banking platform in-house to have their developers work on the very same environment that we use to develop our core products. We’ll take care of all the necessary aspects of operating this development environment.
ADAIaaS is built in an extensible way, so that clients can expand or shrink their development environments based on their needs.
The next 12 months
Our new Front Workplace will become the new standard for relationship managers. It can be used in conjunction with our core banking platform but also independently.
Avaloq Open APIs will be available in the service centres, enabling our clients to benefit from the capabilities of the Avaloq integration ecosystem.
The Avaloq Developer Sandbox service offering will enable developers from banks and community clients to create integrations and to access the latest releases of Avaloq products, with a reduced learning curve and entry barrier to Avaloq applications.
Avaloq will also offer data analytics capabilities as part of the service centre offerings.
The next 24 months
We will focus on offering our services to clients globally and continue to expand our technical footprint. We currently have technology hubs throughout Europe, Asia and Australia.
The flexibility of the software-defined data centre (SDDC; see separate chapter) infrastructure forms the basis for offering all of these services in a highly versatile way on a global scale.