Capitalizing on data: storage, the sesame of digital banking

The pandemic has given rise to a spike in the adoption of online banking applications in the United Kingdom, to the detriment of traditional banks, all facing the need to digitize more. Mobile applications have thus experienced one of the biggest booms in terms of use: about 50% of French customers would thus be ready for an exclusively digital experience, even if the latter however needs to be further improved, according to the conclusions of a study by Bain and Company. In a rapidly evolving sector, lesser-known banks have managed to establish themselves as major challengers because they have made it a point of honor to offer an exceptional online experience. To remain competitive, traditional banks must be inspired by this in order to expand their own offer by offering a fluid experience to their existing and future customers.

Banks have understood that technological progress is not enough to achieve a total digital transformation. These professionals must continuously invest in their infrastructure to retain their customers. At a time when more and more people are relying on online banking applications, it is becoming imperative to offer a fluid user experience to stand out from the growing competition. Efficient storage solutions form the backbone that underpins and guarantees customer access to a digital banking ecosystem. By prioritizing the customer experience and protecting its data, the financial services sector has the means to meet the growing demand for online banking services, with a superior user experience for customers of all ages and socio-demographic categories.

Ever-increasing storage needs

The way customers interact with their bank or financial institutions has changed radically, moving from printed documents to data stored online and in the cloud. France would have lost almost 3,000 branches in 10 years: it had 34,298 bank branches at the end of 2022, according to the European Central Bank. This transition to digital technology, as well as the advent of neobanks (100% online banks with no physical branches), has led to a significant increase in the production of data and metadata. As a result, these increasing volumes of data call for stable, scalable and more innovative solutions. These volumes of data collected fluctuate from one bank to another, as well as their storage needs, depending on the digital processes of each establishment. In any case, a bank, whether it is hybrid with physical premises and an online presence, or a neobank, also needs very robust solutions capable of facilitating the management of its activities in connection with its reinforced online presence.

Before the advent of modern banking, financial institutions kept only the basic data relating to their customers – first and last names, date of birth, address and account number. With the boom in online banking, these institutions have undertaken to collect more actionable data from their customers’ transactions. This is the case with metadata relating to customer consumption habits in order to identify potential risks in the event of a credit application, via the implementation of risk management processes and the exploitation of information collected during customer surveys. With the increasing implementation of artificial intelligence technologies, banks are collecting rich information that needs to be stored, managed and secured to guarantee the protection of personal data. Financial institutions need to reassess their current storage needs in order to implement resizable and more efficient solutions that can adapt to their changing data needs.

Flash memory storage, in particular solid-state drives, has been very popular in companies and financial institutions since the late 1980s due to its speed and short deadlines for recovering data. SSDs give faster access to so-called hot data than traditional hard drives, rather allocated to the storage of so-called cold or lukewarm data.

Banks have the possibility of exploiting flash storage for the rapid completion of very data-intensive tasks, for example those related to the processing of their customers’ transactions and the analysis of information in real time. When it comes to data management, SSDs used for hot storage play an equally important role as hard drives adopted for cold storage. Hot storage is critical for information that banks need to access immediately, such as transactional data. Conversely, cold storage is useful for archiving data. Hard drives do not necessarily offer the same speed of access for data recovery, but their capacities are superior, for an interesting terabyte rate, synonymous with an attractive total cost of ownership (TCO). When it comes to archival data, the required degree of accessibility is one of the main points to take into account. If the backups and archives are recoverable, several minutes or hours may be necessary in the case of archived cold data. With the key to different manual requests depending on the type and size of the files concerned.

With modern banking, institutions are integrating data analysis and AI into their storage solutions. According to analyst forecasts, the AI-based storage market is expected to represent around $25 billion globally by the end of 2025. AI can be used to identify and optimize the storage needs of a bank, segment this data into required live data and archives as appropriate. It can even automate storage management processes according to defined deadlines.

Staying the course in the face of the new state-of-the-art banks

Digital and physical banks are under pressure, as they must keep pace with changing expectations for optimal customer experience. This implies high-performance and high-capacity storage solutions that will guarantee the user a fluid experience, associated with quick access to their data and services.

The future of online banking will be placed under the sign of practicality optimized for the customer, which requires, on the institutions side, to have the ad hoc infrastructure. To remain competitive, banks must strengthen their storage solutions in order to stand out in a highly competitive market. The growth of digital banking has led to colossal amounts of archival data and live data. Banks that invest in resizable and secure solutions can offer personalized experiences to their customers. Real-time transactions and information from data mining will thus be trustworthy in the eyes of the consumer, which will forge a strong bond with long-term or new customers. Efficient storage solutions will allow the sector to gain in performance.