Rackspace - Data: centre of the new banking universe – Darren Norfolk
As the evolution of fintech continues to define the shape and direction of the UK banking sector, an age-old factor is rearing its head once more in the strategy of financial institutions: customer centricity. Future Banking talks to Darren Norfolk, managing director UK of Rackspace, about how his company is helping banks bridge the divide between the demands of their core business, and the needs and aspirations of its customer base.
Getting in touch with one's bank used to be simple. Before Twitter - before Facebook, WhatsApp, Instagram or Snapchat, for that matter - the customer had two choices. The first was the most straightforward but also the most time-consuming; travel in person to your bank of choice and stand in a queue behind the register until it was your turn to be seen. The alternative, of course, was to call.
"In the past, you had to find yourself a telephone and ring the company switchboard if you wanted to make your views known," says Darren Norfolk, managing director UK of Rackspace, one of the world's fastest-growing cloud solution providers. Now, he muses, things are a little more complicated. "Today, you can get on a firm's radar by just tweeting something in about 30 seconds, and then that becomes something that they've got to react to."
Such variegated access to advice at one's bank naturally has its advantages for both parties. For the consumer, any problem they might have can be identified and solved quickly, smoothing out a wrinkle in their relationship with their financial institution that might otherwise have festered through neglect. The bank, meanwhile, is able to move along a higher plane of customer relations, wherein their customers continue to remain happy and satisfied to keep their current account firmly within their grasp.
It's a simple premise, but one supported by a sophisticated and highly complex IT system architecture. Gone are the days when banks were asked to devote their attention solely to the mundane business of opening accounts and extending lines of credit. Today, every financial institution worth its salt has to be in the possession of networks and storage solutions that enable banks to almost instantly recall data on everything from sophisticated investment products to customer transactions. What's more, it's expected to do so from an increasing number of digital products and platforms. In a survey commissioned in tandem with research firm Opinion, Rackspace found that 68% of customers surveyed were willing to experiment with hosting new mobile and digital apps if they saved them time, money and hassle.
In fact, the work being conducted by Norfolk and his colleagues has been instrumental in allowing companies of all types, and financial institutions in particular, to keep pace with the volume and variety of data they are required to process. Currently, the firm serves 205,000 customers across four continents, focusing on giving every one a sophisticated and secure digital storage solution.
"With customers having the ability to give feedback so frequently, a business has to be able to innovate and change product roadmaps very, very quickly," says Norfolk. "There is a heightened urgency in this respect."
"Our strategy is based around industry-leading technology coupled with world-class expertise and support," says Norfolk. "We are an organisation that prides itself on looking at who the market leaders are from a technology standpoint, and then adding our services and support on top of that, thereby enabling organisations and customers to free their resources up to continually innovate and drive their businesses forward."
Above all, what distinguishes Rackspace from its competition in this area is its army of experts. The company employs 3,000 cloud engineers in over 120 countries. Additionally, this has permitted Rackspace to easily weather the recent spell of turbulence in the cloud solutions market by catering for the rapidly increasing demand for multicloud solutions.
Central to that is the company's focus on analysing its clients' core strengths. For a bank to adequately meet the needs of its customer base, it needs to be fully aware of the extent to which its products and services are meeting expectations. The logic behind this approach was confirmed in a recent survey commissioned by Rackspace in collaboration with the Financial Times to analyse long-term growth prospects for UK businesses in the short-to-medium term. Most of the companies surveyed considered pairing a high level of customer service with advanced products and services as vital to sustained growth. It is by mapping the precise relationship between innovation and customer centricity in the clients' business that Norfolk and his colleagues are able to tailor new cloud solutions in an efficient and cost-effective way.
And the best way to do that, Rackspace believes, is through the provisioning of a multicloud solution - an increasingly popular option for their clients in the financial sector. However, that does not mean that resistance among banks in moving their data and operations to the cloud has entirely faded.
Facts versus perception
"There is still the perception out there among financial institutions that public clouds are less secure and therefore constitute a riskier option," says Norfolk. However, Rackspace's MD is more inclined to believe that this is really more the symptom of a general mindset in a sector centred on the adoption of new technologies. "In all of the engagements we've had in the technology and marketing areas of the businesses we talk to, there is a good awareness of what the cloud can bring to their organisation. That, however, can be inhibited by a resistance to change, fuelled by a cultural way of doing things."
This, Norfolk says, is unsurprising given the vast amount of data that banks not only have to store but also secure. Yet, Rackspace hardly has a difficult time overcoming this reluctance. Last year, the company signed one of the UK's largest challenger banks, helping it to enhance the performance of critical applications by 300% through spreading its applications across a set of public and private cloud solutions.
"We've also started offering Rackspace-managed security services around our customer environments because the threat of unwanted people into your environment is becoming the norm," says Norfolk. "What we've done is leverage our experience in cybersecurity into a service for our clients that mitigates risk for them and their customers."
All of this has been achieved only because Rackspace has placed customer satisfaction at the very heart of its long-term strategy for clients. "When they see other areas that can add value and obviously grow our revenue streams for us, we will always consider that option," says Norfolk. What's more, he is confident that the cloud solutions Rackspace provides for clients effectively thread the needle between innovation and the need to meet quarterly earnings targets. Increasingly, investment in the cloud is becoming one fewer issue for banks to get jittery about before the annual shareholders meeting.
This is all the more important considering the pace at which financial technology is changing. The concept of the internet of things is one that Rackspace is paying particularly close attention to. "I think it's something that is becoming increasingly prevalent," says Norfolk. "The number of connected devices by 2020 will be around 35 billion, and you can already see the vast amount of data and information that's being used on a regular basis to help customers and consumers.
"A great example I was looking at the other day was around how using the internet of things on consumer goods like dishwashers is enabling people to know the thresholds from which they can judge the need to order more dishwasher tablets. Machines are now effectively learning and often anticipate the needs of their users before they even know them."
As far as Norfolk is concerned, while this may add up to a pile of prosaic data points in the raw form, once distilled it will become the primary way by which corporate institutions, including banks, will keep ahead of market trends. What's more, Norfolk is confident that Rackspace will be ready to provide those organisations with the cloud solutions necessary to efficiently and securely store that information: "We're proud of what we are able to achieve for customers to drive their outcomes, whether that be in a planned and structured way, or in a fast and agile manner."