How Payment Providers Can Modernize Their Data Strategies

To capitalize on opportunities and overcome challenges, payment providers must make the most of their data. Hybrid infrastructure can help

Adrian Mountstephens
How Payment Providers Can Modernize Their Data Strategies

To stay competitive, relevant and secure, payment providers and other financial services companies are going through a massive digital transformation process. To enable that transformation, these companies are embracing hybrid multicloud architectures.

In the 2022 Equinix Global Tech Trends Survey, about 79% of global IT leaders across industries said that their organizations currently work with two or more cloud providers. Financial services organizations have good reason to be especially cautious about not depending too heavily on a single cloud provider. Avoiding vendor lock-in in their cloud environments can help payments companies:

  • Implement redundant infrastructure on multiple clouds to remove the single point of failure and prevent service outages
  • Unlock the full potential of open banking and Banking as a Service by moving data freely across the banking ecosystem, without interoperability issues or excessive fees
  • Store and move data in compliance with data sovereignty and privacy regulations such as GDPR, CCPA and PIPL

Enabling banking ecosystems through real-time payments

This white paper reveals what the future payments ecosystem enabled by real-time payments (RTP) will look like, the current state of RTP globally, and the key challenges facing banks and other players.

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The common factor across all these points is data. We live in an era when data has never been more valuable, which means it’s never been more important to store and transfer data the right way. With the growth of artificial intelligence and machine learning (AI/ML) technologies, payments companies can analyze their data in real time, capture insights at scale, and apply those insights across their operations to drive better results. In contrast, companies that fail to fully capitalize on the opportunities hiding in their data will miss out on a key source of competitive differentiation.

Traditional banks are sitting on mountains of data, but many of them lack the modern payments infrastructure and data analysis capabilities they need to extract insights and business value from that data. As fintechs and modern challengers use data to open up new revenue streams, an optimized customer experience and better analytics, traditional banks risk being left behind. They need to optimize their data management strategy, and a hybrid multicloud approach can help them do that.

Architecting for data at core and edge locations

Modern digital infrastructure is made up of three distinct components:

  • The digital core, where historical data is stored and used
  • The digital ecosystem, where all members of the value chain come together to share data among themselves
  • The digital edge, where end users create and interact with data

All three of these components require effective, secure storage solutions to allow access to relevant data on demand. To achieve that goal, financial institutions can take a cloud-adjacent approach to digital infrastructure.

Essentially, cloud adjacency enables the next step in the evolution of hybrid multicloud. It entails deploying core digital infrastructure in cloud-adjacent data center locations that provide connectivity to cloud on-ramps. As a result, companies can maintain data sets wherever they need to, depending on scenarios like special data sovereignty and privacy requirements. Also, they can make use of a partner’s data services solution that facilitates data portability and management across their hybrid multicloud architecture.

They can move data to and from the clouds of their choice quickly and cost effectively. They’re also able to integrate with customers, partners and service providers from their digital ecosystem, adding new capabilities and creating monetization opportunities. Finally, placing digital infrastructure closer to end users at the digital edge can help execute payments in real time and support an optimized user experience.

How NetApp, Equinix and AWS support optimized data storage

We live in an era when data has never been more valuable, which means it’s never been more important to store and transfer data the right way."

As financial firms create their modern data management strategies, they need an agile data platform that lets them move data where it needs to go based on ever-changing requirements. NetApp® storage solutions provide a set of standards-based, simple-to-use capabilities that make it easy to prevent unauthorized access, disclosure and modification of stored data. These solutions can be deployed in cloud-adjacent Equinix IBX® colocation data centers or on the Amazon Web Services Cloud, without sacrificing the agility and flexibility that payments companies expect from their hybrid multicloud architectures.

For example, NetApp ONTAP® data management software features robust authorization, access control and logging capabilities. It provides data-at-rest encryption and immutability to comply with stringent data privacy regulations. Customers can deploy NetApp ONTAP software in seconds on AWS or on Equinix Metal®, our dedicated Bare Metal as a Service offering, using NetApp’s software-defined storage environment.

Another case in point of how customers can leverage the combined power of a hybrid architecture is through the NetApp StorageGRID® solution. StorageGRID is a best-in-class object storage environment for smart, fast and future-proof object storage. From a compliance perspective, the solution safeguards data transactions with secure-socket layer (SSL) endpoints, encrypts data at rest, and supports read-only storage node access (WORM). Similar to ONTAP, StorageGRID can be deployed on Equinix Metal or AWS in a matter of seconds.

NetApp storage solutions are cloud agnostic and can integrate harmoniously into a hybrid multicloud architecture. Payment providers can use these solutions to their full potential without worrying that vendor lock-in will derail their infrastructure modernization plans. In addition, Equinix’s global private network connects to a financial ecosystem of more than 1,250 potential financial partners and more than 1,500 cloud and IT service providers around the world. Payment providers can use this network to quickly integrate their colocation-based NetApp storage solutions into the public cloud with secure, low-latency interconnection.

Infrastructure modernization offers a path to sustainability

With more financial institutions looking at IT infrastructure modernization as a key part of their sustainability strategy, Equinix and AWS are working to ensure our joint customers have a clear path to achieve their goals. Both Equinix and AWS can demonstrate how moving workloads from legacy on-premises data centers to a hybrid multicloud architecture can help achieve a significant reduction in emissions.

Equinix data centers are designed to be both clean and efficient. In 2021, Equinix achieved 95% renewable energy coverage across our global data center portfolio, including 100% coverage in Europe. We’ve increased energy efficiency using data center innovations such as airflow management and high-density cooling, and we’re applying those innovations to help our customers “green” their digital supply chains.

Take the next step in your data modernization journey

As financial organizations accelerate their digital transformations, hybrid multicloud will only continue to grow more important for them. With the industry finally moving past its initial skepticism, the question is no longer if they should deploy a hybrid multicloud architecture; now, it’s how they should deploy it. Each organization must define a clear data strategy that optimizes every component of their hybrid infrastructure.

This means they must build the foundations to ensure digital trust and compliance, improve resilience, empower end users and unlock the value hiding in their data sets. The good news is that every financial institution is facing the same tough choices, as the future remains highly dynamic. Setting your organization up to flexibly respond to change while avoiding new legacies is essential. The right partners can accelerate this learning curve and help you implement the technology you need.

To learn more about the challenges facing financial institutions and how digital infrastructure modernization can help overcome those challenges, read the white paper “Real talk about real-time: Enabling banking ecosystems through real-time payments.”

 

Financial firms...need an agile data platform that lets them move data where it needs to go based on ever-changing requirements."
Adrian Mountstephens
Adrian Mountstephens Business Development Senior Manager
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