Modernizing Your Data Infrastructure

An IDC InfoBrief, Sponsored by IBM | October 2018
By Ritu Jyoti, Program Vice President, Systems Infrastructure Research Portfolio, and Jerry Silva, Research Director, Global Retail Banking
Modernizing Your Data Infrastructure:
Strategic Priorities for Financial Services

IDC Infobrief | Modernizing Your Data Infrastructure: Strategic Priorities for Financial Services
Sponsored by IBM | Page 2
Digital transformation (DX) enables enterprises to
seamlessly blend digital and physical business and
customer experiences while improving operational
efficiencies and organizational performance.
Ultimately, DX is about making the institution more
agile to respond to and create disruptions in the
industry. Fueled by 3rd Platform technologies (mobile,
social business, cloud, and big data and analytics),
DX is propelled by innovation accelerators like the
Internet of Things (IoT), cognitive/artificial intelligence
(AI) systems, next-generation security, 3D printing,
augmented and virtual reality, and robotics.
Executive Summary: Financial Services
is at an Inflection Point
By 2021, IDC predicts that at least 50% of global GDP will be digitized, with growth in every industry
driven by digitally enhanced offerings, operations, and relationships. Additionally, IDC estimates that
financial firms are dedicating 25%-30% of IT spend on DX initiatives in 2018.

As DX strategies go from the drawing board to production, an unprecedented
wave of innovation will sweep over financial services, disrupting firms of
all sizes. IDC research shows that 18% of traditional revenues are at risk of
disruption in financial services. To thrive, financial services firms are embracing
digital as a top business objective and their priorities include:
Executive Summary (continued)
1. Improve customer engagement
2. Grow revenue/increase profitability/expand B2B partnerships
3. Compliance/risk mitigation management/improve security/avoid penalties
4. Increase operational efficiencies/reduce cost
5. Participate in digital marketplaces

To create a sustainable competitive advantage in the digital
era, financial services firms need to modernize their data
infrastructure by focusing on three strategic priorities:
Digital Era Success Requires
Infrastructure Modernization
1. Delivering an optimal omni-experience to engage customers
2. Building and retaining digital trust
3. Driving operational efficiency and agility

Enabling and embracing a 360-degree customer view
Strategic Priority: Omni-Experience
Customer Engagement
Data Infrastructure Requirements:
• Edge to core to cloud – seamless data pipeline and availability
• Data quality and profiling
• Data synchronization (internal and external data sources)
• Metadata management
• Data location optimization
• Acceleration and optimization of analytics/AI workloads
• Consistent and balanced performance
Corporate banks will invest
$2.2 billion in big data and
analytics in 2018 — 20% more
than in 2017.
Retail banks will additionally
invest $20 billion in big data
and analytics in 2018 – 14%
more than in 2017.

In 2018, retail bank spending on next-
gen security-based authentication
methods will rise by 20%.
Spending on financial crimes and
information security technologies will be
$25 billion in 2018 and still growing
strongly at 6.5% globally.
Building and retaining customer trust
Strategic Priority: Digital Trust
and Stewardship
• Risk mitigation
• Data loss prevention
• Secure multi-tenancy
• Encryption, auditing, logging, and role-based
access and control
• Adherence to geo-industry regulations
• Consistent and granular backup, restore,
disaster recovery, and continuity across data
deployment locations

53% of financial services firms surveyed
use hybrid cloud today.
Through 2021, NVMe-based systems
enabling real-time analytics/AI workloads
will replace SCSI as the protocol of
choice in enterprise-class flash arrays.
Enabling the ability to “right source” data and applications
Strategic Priority: Efficiency and Agility
• Leverage existing investment
• Modernize legacy infrastructures
• Integrate and optimize cloud adoption
• Adopt flash/NVMe
• Modernize IT infrastructure, DevOps,
containers, hyperconverged infrastructure
• Support business agility

1. Modernize infrastructure. For each application’s underlying infrastructure, decide whether to let it run to the
end of its useful life, upgrade capacity/performance, or migrate to a new architecture. Older compute and
storage resources on maintenance can be used for smaller sites or DR. Accelerate performance in existing
infrastructure by adding flash for persistence or caching.
2. Define the infrastructure stack for new, custom applications. Work with application teams and line of
business to understand the range of applications in queue and how the stack can be optimized from a
software and hardware perspective. Understanding the application development environment and how teams
architect the applications will inform a scale-up or scale-out infrastructure strategy.
3. Develop an IaaS and PaaS strategy. Research and develop acceptable use of public cloud PaaS and
IaaS. Investigate use today and the need for internal, private cloud IaaS and PaaS environments. Leading IT
organizations are building out PaaS and IaaS environments to enable innovation environments for developers
and DX/CX initiatives.
Recommendations for Successful
Infrastructure Modernization
IDC offers the following guidance for organizations updating
their data infrastructure to support DX:

Financial services firms that embrace DX now will deliver better products and services faster than their
competitors. It all starts with the right storage solution and partner. The time, cost, and complexity of
developing a comprehensive storage strategy to modernize your data infrastructure may require a
consulting partner. With consulting partners, the resulting solution will be fully tailored to the financial
services firm needs and well-integrated with the data center.
Chosing the Right Storage Solution and Partner
CONSIDERING IBM

In the DX era, project sponsorship and budget are managed by committee and consensus, aligned
with business objectives. The changing nature of today’s buying teams means IBM’s Infrastructure/
storage sales team must understand the perspective of the functional leaders (e.g., CMO, CISO, CFO)
and industry-specific personas. They need to preserve the existing relationships while branching out
to functional leaders.
Challenges and Opportunities
In an ever-expanding universe of hybrid and multicloud
deployments, IBM offerings need to support seamless integration
with multiple public cloud services such as Amazon Web Services,
Google Cloud Platform, and Microsoft Azure along with IBM Cloud.
CONSIDERING IBM

1. Industry IT Communications Survey, IDC Customer Insights and Analysis, April 2017
2. Analytics: The real-world use of big data in financial services, IBM Institute for Business Value, in collaboration with Saïd Business School at the University of Oxford, 2013
Among financial services companies, a chicken-and-egg situation appears to exist between analytics and data
infrastructure, with many analytics solutions deployed to overcome immediate challenges like improving customer
engagement through more targeted marketing campaigns.
However, a 2017 IDC survey1
found that banks ranked both big data (including infrastructure) and analytics as their
top priorities over all other initiatives including security and risk, the Internet of Things, and more efficient resource
allocation. The focus on data infrastructure is a long-term strategy that will strengthen the ability of banks to
respond to changing market conditions and customer demands.
The Benefits of a Modernized
Data Infrastructure
CONSIDERING IBM
For example, Singapore-based OCBC bank has leveraged benefits from an enterprise data infrastructure
strategy, along with a robust omni-experience environment, to precisely target customers with more suitable
products and services. The bank recognized a return on its investment in 18 months, experienced a 45%
improvement in conversion rates, and increased its cross-sales by 60%.2

IBM Solutions Map to Business Priorities
IBM storage solutions can help financial services firms modernize their IT
infrastructure for the digital economy, based on their three business priorities:
Achieving Omni-
Experience Customer
Engagement
• IBM FlashSystem 900, IBM
Flash V9000, Storwize
V5030F, IBM Storwize
V7000F, IBM DS8880F, IBM
FlashSystem A9000, IBM
FlashSystem A9000R, IBM
FlashSystem 9100
• IBM Spectrum Virtualize
• IBM Elastic Storage Server
(ESS), IBM Cloud Object
Storage, IBM Spectrum
Computing
Building Digital Trust
and Stewardship
• IBM Spectrum Protect
• IBM Spectrum Protect Plus
• IBM FlashSystem A9000,
IBM FlashSystem A9000R
• IBM DS8000, IBM Cloud
Object Storage, IBM
Spectrum Virtualize
Driving Efficiency
and Agility
• IBM Spectrum Virtualize
• IBM FlashSystem 900,
IBM FlashSystem 9100
• IBM Cloud Object
Storage
CONSIDERING IBM

IDC Analyst Profiles
Ritu Jyoti
Program Vice President, Systems Infrastructure Research Portfolio
Ritu Jyoti is program vice president for IDC’s Cloud IaaS, Enterprise Storage and Server team, which includes research offerings and
quarterly trackers as well as advisory services and consulting programs. Ms. Jyoti is responsible for managing the systems infrastructure
research portfolio spanning topics such as cloud computing, software-defined infrastructure, cloud data management and protection,
infrastructure for artificial intelligence, acceleration and automation, big data analytics workloads infrastructure needs, and digital
transformation-IT transformation infrastructure strategies.
Jerry Silva
Research Director, Global Retail Banking
Jerry Silva is research director for IDC Financial Insights responsible for the global retail banking practice. Mr. Silva’s research focuses
on technology trends and customer expectations and behaviors in retail banking worldwide. Mr. Silva draws upon over 25 years of
experience in the financial services industry to cover a variety of topics, from the back office, to customer channels, to governance in
the technology shops at financial institutions.
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Copyright 2018 IDC. Reproduction without written permission is completely forbidden.

The data presented in this InfoBrief comes from several of IDC’s global, web-based surveys, including:
US43259717: IDC FutureScape: Worldwide Financial Services 2018 Predictions
US43171317: IDC FutureScape: Worldwide IT Industry 2018 Predictions
US43275117: IDC FutureScape: Worldwide Enterprise Infrastructure 2018 Predictions
US44159818: IDC’s Worldwide Data Services for Hybrid Cloud Forecast, 2018–2022
Methodology

MESSAGE FROM THE SPONSOR
To learn more about IBM’s solutions, visit www.ibm.com/storage

Modernizing Your Data Infrastructure

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