Cloud adoption in Malaysia’s financial services sector not fast enough — Nutanix

10 July 2020 Cloud adoption in Malaysia’s financial services sector not fast enough — Nutanix
KUALA LUMPUR (July 7): Some 64.7% of Malaysian financial services institutions (FSIs) were already in the process of developing a cloud strategy, indicating a good start to cloud adoption as early as 2018, according to Nutanix Malaysia country manager Avinash Gowda.

California-headquartered and Nasdaq-listed Nutanix Inc makes information technology (IT) infrastructure invisible with an enterprise cloud platform that delivers the agility and economics of the public cloud — without sacrificing the security and control of on-premise infrastructure.

“But when it comes to the actual implementation of the cloud, we are seeing slower uptake,” Gowda told theedgemarkets.com in an exclusive interview.

In an email reply, Gowda said digitalisation in Malaysia’s financial services industry is accelerating rapidly, driven by competitive new market models, shifting commercial objectives and customer expectations.

He said the cloud is an imperative that FSIs need to embrace, and quickly.

“The digital banking revolution has given rise to new players that are building their business models on the foundations of speed, agility and innovation.

“The incumbents are playing catch-up, but cloud infrastructure can help them get ahead,” he said.

Gowda said FSIs in Malaysia were initially cautious about upgrading their legacy infrastructure because of the complex regulatory and security landscape.

“This changed when Bank Negara Malaysia (BNM) developed a policy framework which offered a set of guidelines for financial organisations to help them adopt cloud technology.

“Today, we are seeing growing demand for cloud services among traditional FSIs, especially as a tool to transform and keep pace with disruptive fintechs (financial technologies).

“A recent PwC (PricewaterhouseCoopers) report showed that 82% of Malaysian FSIs actually worried about losing to fintechs, and without digitalisation this fear will become reality,” he added.

Commenting on the Covid-19 pandemic that has hit most sectors, Gowda said FSIs will need to be leaner, lighter, hungrier, more agile and adaptable to cope with requirements of a “new normal”.

“Business survivability is the new benchmark. Companies that thought they were safe prior to the pandemic have now realised that they are also susceptible to external risks,” he said.

Gowda said while Malaysia’s economy gradually reopens, remote working is set to be a default for the foreseeable future, increasing the need for businesses to operate leaner and with more flexibility.

He said there will be accelerated adoption of remote working technologies, all of which require an agile cloud-based infrastructure.

“The pandemic demonstrated that the future of work and digital transformation both play an incredibly significant role in shaping the industry’s infrastructure.

“These are factors that are paramount in the world of financial services and with remote work set to be a long-term fixture, this will continue to impact the approach many financial organisations are taking in building and scaling their IT infrastructure,” he said.

Gowda said some of Malaysia’s largest banks and insurance companies — both commercial and Islamic — are working with Nutanix to modernise their infrastructure and leverage the Nutanix Enterprise Cloud Platform to run their mission-critical applications and workloads.

He explained that many businesses also rely on the agility and flexibility of Nutanix’s infrastructure to run operations, transactions and deployments outside of Malaysia and across other markets.

He cited, for example, local Fintech player Tranglo, a cross-border money and prepaid credit transaction hub that facilitates settlements of goods and services across countries.

“Tranglo was growing rapidly at a rate of 366%, having processed US$5.05 billion (RM21.57 billion) worth of payments as of Dec 31, 2019.

“The business decided to move off a public cloud when cloud rental cost started growing 10% to 20% every six months.

Gowda said Nutanix worked with Tranglo on its move to a private cloud built on the Nutanix Enterprise Cloud Platform.

“As a result, Tranglo witnessed a 100% increase in performance, with capabilities to process three times more transactions than it did on the public cloud.

“Tranglo reduced its IT cost by 50% over a three-year period, which meant it could plough these savings into hiring more people and boosting skill sets,” he said.

Responding to a question about malware threats, Gowda said Nutanix had a strong suite of security capabilities, led by its security-first design and “defence in depth” that can meet the most stringent requirements known to the financial services industry.

“Security of the enterprise begins with a robust infrastructure foundation, and we pride ourselves on improving an organisation’s security posture by ensuring that any potential entry for bad actors is a focal point,” he said.

On the cost aspect, Gowda said many cloud providers offer the ability for enterprises to “outsource” their IT systems, and in some cases departments, to a vast cloud network.

“By renting a cloud, the client pays a set-up fee, followed by a core monthly subscription. Additional services come at a cost and may be temporary or permanent.

“This model helps companies avoid spending multi-millions of dollars up front on IT infrastructure and personnel, while spreading the cost over a longer period,” he said.

Gowda said Nutanix is actively working with various government agencies and key statutory bodies in the market to modernise their infrastructure in preparation for the digital economy.

“The movement control order (MCO) period was an interesting one as it served a wake-up call for the public sector when they realised their current processes could not cope with the demands of a disrupted workforce.

“As such, we saw a tremendous surge in public-sector procurement,” he said.

Source: TheEdgeMarkets