Balancing Security, Availability and Connectivity in the Modern Financial Services Landscape

David McCall, Chief Innovation Officer, QTS Realty Trust

The financial services industry has fully embraced digital transformation, evolving from in-person transactions at local branch offices to comprehensive online experiences from anywhere. In 2021, the number of digital banking users in the U.S. reached 196.8 million. The rising acceptance of financial technology (fintech) organizations, such as Venmo, Zelle, GoFundMe and Apple Wallet, adds to the surging amounts of data financial services organizations need to manage and protect.

As customers increasingly conduct transactions, view account details, transfer funds, deposit checks and make investments—online and in real-time—downtime and delivery lags are simply unacceptable. Users demand an ease and speed of service that escalating internet traffic and strained bandwidth can challenge. To avert these issues, organizations need to establish and maintain robust, redundant, and flexible interconnections to provide customers with rapid, 24x7x365 access to their accounts and funds.

While this digitalization delivers a new level of access and convenience for customers, it also introduces a number of challenges and risks for the organizations. Already under intense pressure to meet rigid regulatory requirements, the digital shift exposes organizations to a widened attack surface, making it more critical and challenging to protect sensitive data and critical systems from cyber threats and physical disasters. Failure to meet strict compliance obligations results in hefty fees and impacts the organization’s reputation and customer confidence. In 2020, there were 3,932 publicly disclosed data breaches which exposed 37 billion records. With the average cost of a data breach at $4.24 million per incident, financial institutions have a lot on the line.

Organizations that cannot deliver the speed, reliability and security stakeholders require risk customer churn and sagging revenues. Balancing this potpourri of demands is a challenge for organizations, especially as they focus on delivering continually advancing products and services that create a competitive advantage. A third-party data center can help alleviate these issues and provide the secure, resilient and highly connected environment needed to support a powerful and continually improving financial services experience.

Colocation Strengthens Resiliency, Security and Connectivity

Colocation data centers integrate leading-edge physical infrastructure and best practices to address the rigorous compliance and performance challenges the financial sector faces.

Security to Support Data Privacy and Meet Rigorous Compliance Obligations

Financial services institutions operate in a demanding regulatory environment that can levy serious consequences and hefty fines for noncompliance. Third-party data centers are equipped to deliver risk-based information security and physical security programs to identify and manage risk and effectively safeguard customers’ private data and critical systems. Comprehensive internal compliance programs and certifications, such as SOC 1 and SOC 2, PCI DSS, ISO 27001, HITRUST and FISMA, are designed to meet the industry’s rigorous standards and help organizations meet their own regulatory requirements.

Access to Diverse Connections to Ensure Low Latency for an Instant-access World

Financial services organizations feel the mounting pressure to deliver real-time, on-demand access to information as data surges and bandwidth is strained. Connectivity-rich data centers can help organizations deliver the necessary connections to ensure high-performing, low-latency access and data delivery.

Data centers that offer a variety of connectivity options such as dark fiber, LIT networks, internet exchanges, cross-connects and peering, as well as access to multiple internet service providers (ISPs) and public clouds, can help boost resiliency and enable organizations to build reliable, high-performing connectivity strategies.

The flexibility of the solution is also key. Carrier neutrality allows organizations to connect with the carriers of their choice, while dual connections into the facility and redundant network paths ensure uninterrupted connectivity if one source is down. Colocation also offers flexible bandwidth options to allow organizations to quickly scale capacity to address traffic spikes or new demands. Additionally, data centers can offer access to subsea cabling to provide the lowest latency connections to international markets.

Diverse Locations Foster Rapid Delivery and Business Continuity

Achieving low-latency delivery stretches beyond simply having enough bandwidth. A data center provider with a portfolio of geographically diverse locations enables fintech organizations to establish presences near customers, partners and vendors. This proximity reduces the distance data must travel to minimize latency and improve performance.

Access to a network of strategically located facilities can also help create a disaster recovery (DR) strategy to maintain uptime, build resiliency and satisfy compliance demands.

Scalability and Redundancy Strengthen Availability as Data and Traffic Intensify

Data centers are designed to deliver unrelenting uptime. Scheduled maintenance programs, ongoing monitoring, built-in system and connection redundancies, and multiple power and connectivity feeds heighten operational integrity and ensure customers have on-demand access to their accounts and funds.

As more transactions move online, colocation also allows organizations to seamlessly expand their footprints or introduce new connections to accommodate growth and promote performance. Rising internet traffic also stresses capacity, making elastic bandwidth increasingly essential to avoid outages and enhance the customer experience.

Expertise to Develop and Sustain a High-performing Environment

As security breaches become increasingly sophisticated, protecting the environment, optimizing operations and maintaining uptime becomes more challenging. According to one report, 65% of cybersecurity professionals think their organizations should provide more cybersecurity training. Insufficient experience can be detrimental to organizations as it can expose them to increased risk.

Colocation data centers offer the expertise to promote a more secure environment. Their attention to the security, compliance and performance of the data center allows internal teams to focus on core business objectives rather than data center management. This knowledgeable team also stays abreast of complex and rapidly evolving IT demands and compliance requirements to ensure the most appropriate measures are being taken.

Finding the Right Fit

Building an environment to meet the multi-faceted expectations of the financial services market is not an easy feat, especially as the industry continues to invest in digital transformations. A modern third-party provider with the necessary security, availability and connectivity—punctuated with a vision for the future—can be a crucial differentiator.

As financial services organizations plan for futures stoked by technology, third-party data centers can deliver the support and services the industry needs to thrive. By balancing innovation with increasingly intense compliance demands, this partnership can securely enrich organizations’ competitive edges to better address customers’ evolving preferences and needs to build a more profitable future.

David McCall is the Chief Innovation at QTS Realty Trust. QTS, a leading provider of hybrid colocation and mega scale data center solutions, skillfully supports the demands of the financial services market, providing value-infused capabilities. Its resilient infrastructure, security and interconnections offer the requisite speed, stability and protection the financial sector requires. To satisfy its international focus, QTS also enables direct access to subsea cabling within its Richmond, New Jersey and Hillsboro, OR facilities. The QTS ecosystem also offers access to additional carriers and partners to allow organizations to directly connect and build partnerships.

QTS has a commitment to full data center transparency. Its innovative Service Delivery Platform (SDP), a real-time data center management and optimization platform, provides key insights and on-demand visibility into core data center functionality. Using SDP, customers can view and control physical access to their environments, monitor power consumption and environmental readings, order cross-connects, manage assets, log tickets and access compliance documentation—all in live time.