5 Data Center Considerations for the Financial Services Industry

The digital services and technologies developed for the financial services sector, often referred to as fintech, are expected to become a trillion-dollar industry by 2030. This new generation of fintech solutions leverages the latest technologies, including artificial intelligence (AI), machine learning (ML) and data analytics to enhance the operations of leading financial services companies, increasing their efficiency and introducing new capabilities.

A new white paper by Vantage Data Centers, titled “Driving fintech competitiveness with flexible digital infrastructure,” delves into the growing dependence on technology in the financial services industry.

This white paper examines the reliance of today’s advanced fintech and financial service companies on data centers and digital infrastructure. It also analyzes recent survey and market data to understand the unique challenges and pressures these technologies place on organizations.

The growing use of fintech solutions has amplified the need for data governance and security across financial services companies. This has drawn increased scrutiny from government regulators and those concerned about how and where these companies store citizens’ data.

The white paper notes, “Regulators are increasingly focusing on how this data is securely stored and used, exposing financial services companies to significant risks, including high penalties for compliance breaches.”

Given the critical role of fintech solutions in financial services operations, there’s a heightened focus on the data centers powering them. Applications and digital tools responsible for managing trillions of dollars must always be available; otherwise, billions in revenue could be at stake.

These fintech solutions must cater to the future $20 trillion global financial services industry and be consistently available. This underscores the appeal of colocation. But how can fintech and financial services organizations ensure they select the right data center provider?

The white paper outlines five key considerations for fintech and financial services companies:

1. Scalability
   The fintech industry faces intense competition, and organizations are pressured to optimize resources. The global economic landscape emphasizes cost reduction. As a result, financial services organizations aim to harness digital infrastructure, leveraging AI and ML to scale operations and reduce human-led costs. A recent survey found fintech storage needs have grown by 50-100% in the past three years, highlighting the importance of scalable platforms.
2. Uptime
   Uptime, or the duration a machine operates, is crucial for fintech solutions. Choosing data center and cloud vendors with a stellar operational history is vital. Statista reports that fintech outages can cost an average of $9.2 million per hour, making infrastructure availability paramount.
3. Connectivity
   Payment systems are pivotal to financial platforms globally. High-speed, resilient, low-latency networks ensure fintech operations are swift and dependable. With the surge in online payment firms and digital-only banks, consumers enjoy more options and faster, cheaper technology. However, service complaints have risen. A Boston Consulting Group study revealed that 43% of customers would abandon their bank over a subpar digital experience, emphasizing the need for fintech companies to stay technologically current.
4. Sustainability
   Both consumers and financial institutions are increasingly attentive to energy usage and environmental impact. Fintech’s reliance on big data, AI, ML and real-time analytics make it a significant energy consumer in data centers. A sustainable power supply and efficient operations can have a profound effect. A TBT Marketing survey found that 85% of fintech SMB decision-makers, from companies aged 2-10 years, consider a data center’s environmental impact when deciding.
5. Customer Excellence
   Customer service remains paramount. Fintech companies must optimize their digital infrastructure in line with technological advancements and prioritize exceptional customer service. The fintech industry’s regulatory requirements are intricate, presenting unique challenges. Tailored support and customer care from a reliable data center partner can be invaluable.

To learn more about how to scale your fintech organization’s digital infrastructure to remain competitive and meet the new technological demands, click HERE.