As financial technology develops, it places new demands on organizations and their teams to learn new skills, scale operations and maintain effective cyber security. Software evolution also affects and is affected by customer demands, adding one more layer of urgency to a company’s need to remain current.
Building entirely new software systems, or hardware to support them, at every stage of financial technology’s evolution is not an option for most organizations.
That’s why building future-proof software is so important. This offers a way for companies to continue providing their core products and services while also preparing for future changes.
What Is Future-Proof Software?
Today’s financial sector teams have seen both computer hardware and its software come and go. Solutions, tools and platforms that were state of the art just a few years ago are now hopelessly obsolete.
Rather than invest the bulk of their resources into keeping up with new systems, companies have started focusing on how to build systems that can adapt to future technological changes, customer demands and shifts in business goals. Software earns the label “future-proof” by meeting these expectations.
Future-proofing is a major focus of today’s IT work. “The lion’s share of current software investment is not for greenfield creation, but for the extension and evolution of existing software-systems,” writes researcher Frank J. Furrer.
The push to future-proof software and systems arises in part from the fact that most financial companies have an ever-growing collection of data. That data can provide valuable insights, but only if it can be accessed and managed.
Yet all data is created on a particular system. Many past software tools were not created with future growth or expansion in mind, which means they do not offer an easy way to access the data they create and store except through their own increasingly obsolete software.
“Companies need all of their data — regardless of what generated it, where it is in the business, or what application it is tied to,” Arianna Valentini-Huffield at Syncsort writes. “The freedom to answer questions and to fully utilize all the data at your disposal is essential for business agility.”
Future-proofing helps companies maintain access to key data. It also helps companies support collaboration, even in tumultuous times.
Demand for future-proof software and systems, already on the rise at the end of 2019, exploded as the COVID-19 pandemic created unanticipated pressures to build remote teams, writes Neil Cooke, director of technical services and EMEA at PTC.
Sustainability is key to the functionality of these systems and their ability to support an organization’s long-term growth and goal-directed activities. Future-proofing is the practice of making these systems sustainable and scalable in the long term.
How Future-Proofing Today’s Software Improves Tomorrow’s Growth
Future-proof software, by nature, looks at where a company and its IT systems are going rather than where they are today. By imagining future scenarios and testing software plans against them, financial companies can improve their own work and ability to grow in the future.
Future-Proofing for Data Security
Future-proof software also helps prevent security breaches, something a growing fintech or bank cannot afford to have happen.
When security policies and protocols are integrated into software development and delivery, “you can ensure your security processes and capabilities are consistent across your app portfolio and the app lifecycle,” writes Banjot Chanana, former vice president of product at Docker and current product management leader for Google Cloud.
Integrated security features are also more likely to work seamlessly in the background, protecting data without interrupting work in the system. Portable security solutions help future-proof a company’s software by operating regardless of the OS, application framework or cloud provider handling the software, Chanana writes.
Cybersecurity changes rapidly as hackers and other threat sources continue to innovate their approaches. When data security is integrated into a software system at every stage, that security can grow and adapt with the software and the organization, improving its defenses against breach.
Taking a Whole-Business Approach
Future-proofing software brings another major benefit to financial companies: the chance to pivot IT strategy and even whole business units whenever opportunities arise.
When considering future-proof software options, “our advice is to center your decision-making around the use cases, applications and databases that have the most direct impact on your organization’s strategic differentiation,” writes JD Dentinger, director of messaging for Dell Technologies’ global campaigns.
This approach allows your technology to co-evolve with business goals. That makes for a more agile organization, as Bain consultants Steve Berez and Darrell Rigby discuss at The Enterprisers Project.
When IT teams have a clearer understanding of business goals, they can adapt their own approach to support those goals while also making it easier to make updates and execute responses to future challenges.
3 Key Considerations for Future-Proofing Software
No two financial companies face identical challenges when it comes to software. Each organization has its own unique mix of customer demands, legacy systems, work patterns and other elements that affect software decision making.
Attention to a few key topics, however, can help any organization make better choices regarding future-proof software and systems.
Strike Your Own Balance
In the last few decades, many companies have found themselves in a tug of war between in-house and cloud-based IT solutions. Each option has its various pros and cons, particularly for companies like fintech startups that must balance security concerns with the ability to scale quickly.
There is no single mix of in-house and cloud-based software options that works for all companies. Rather, options like consumption-based IT services offer “an option to help companies find the right balance of cloud and on-site technology in an often-overwhelming tech marketplace,” writes Daniel Newman, principal analyst of Futurum Research and the CEO of Broadsuite Media Group.
For in-house technologies, future-proofing offers a similar option to help companies strike a balance. Building software with attention to future demands on its functionality will give financial organizations a way to balance their need for flexibility and scale with their need for security and control.
Aspire to Flexibility
Future-proofing is often appealing because it feeds our ability to dream big. Yet a vision of future-proofing that only focuses on scale can actually limit growth, writes programmer George Hosu.
Instead, Hosu recommends taking a pared-back, flexible approach. When a company focuses on offering a product or service and then adapting it as customers’ needs grow or change, the company avoids making sacrifices up front that could cost opportunities later on.
“Preparing for the future doesn’t involve tacking on complexity, but rather removing as much of it as possible,” Hosu writes. Preparation, then, is about making the company and its technology adaptable to future needs, he says.
Putting flexibility first can benefit growth in a number of ways. “Not only can adopting flexible IT models free up resources for innovations and other projects, but it can help ensure that you have the bandwidth, security support, and other resources needed to meet your goals,” writes Liz Alton at Connected.
Explore Your Options
Finally, imagine your software five or more years in the future. Does it still run? How well does it scale? Can it be adapted to a related use if customer demand trends in that direction?
Examine multiple options through this lens. “It’s worth taking the time to learn about the possibilities or find outside expertise to provide knowledgeable advice before you pull the trigger,” writes David Linthicum, cloud computing expert and author of InfoWorld’s computing blog.
Future-proof software strikes a balance between accessibility and security. It’s responsive to today’s needs and flexible enough to adapt to future demands, even when those demands are unexpected.
For effective growth, future-proofing is a must.
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