The Fintech industry in Romania is developing rapidly, but for this it needs high-performance data centers to ensure the necessary processing power and security. These two elements are essential for Fintech applications to comply with regulations and be successful in the market. Also, the storage and processing of Fintech data in external data centers and not on an own IT Infrastructure is also a measure that leads to the preservation of capital and its allocation to research and development.
Analysts unanimously agree that the fintech field represents the future of the financial-banking industry. However, to reach their potential, companies operating in this field need high-performance, scalable, and secure IT infrastructures. Difficult, if not impossible, requirements to provide internally, especially since most companies in the field are startups with high technology requirements.
The adoption of Machine Learning (ML) and Artificial Intelligence (AI), for example, requires large processing capabilities. According to Data Center Magazine more than two-thirds of Fintech companies and financial institutions consider AI a vital technology for their development. And for 41%, ML algorithms are already essential components in service delivery. Also, Fintech companies need not only increased processing power, but also fast access to massive volumes of data. According to the cited source, a third of Fintech companies and financial institutions are currently reporting 50-100% increases in data usage and storage needs. And more than half of them expect a more than five-fold increase in the next three years.
Why data centers are the best choice
The previously mentioned aspects are pressing and require quick solutions. For this reason, more and more Fintech companies are opting to migrate to external data centers and/or cloud computing service providers. This way they get not only immediate solutions to the challenges they face, but also many other essential gains, difficult to achieve in their own on-premises data centers.
Superior processing and storage capacity
By migrating to external data centers – such as colocation centers – Fintech companies have the opportunity to increase their processing power as their needs evolve. High processing power plays an essential role in facilitating high-speed transactions. Data centers provide the high-speed connectivity and processing power needed to ensure real-time transaction processing, reducing the risk of errors or delays. In addition, data centers allow financial institutions to use advanced technologies such as machine learning and artificial intelligence to analyze and extract information from massive amounts of data.
High level of cyber and physical security
Migrating to an external data center also ensures better protection against cyber-attacks. It’s a real need as Fintech companies have become an increasingly attractive target for hackers.
It is amply demonstrated by the evolution of DDoS attacks, for example, which are becoming more frequent. However, specialized data centers have the ability to detect and effectively manage this type of problem, being able to quickly block attack attempts and maintain legitimate traffic within optimal parameters.
In addition, external Data Centers go through a strict regulatory process for security requirements and compliance with applicable standards. They cover both cyber security and physical protection. Secure access to resources provides an additional guarantee of the protection of critical data and resources for Fintech companies.
Increased availability, contractually guaranteed
In on-premises data centers the issue of service and application availability is… delicate. Mainly because of the limited resources available – providing extensive redundancy involves a substantial financial effort and the call for advanced skills.
In many situations this is cost prohibitive – such as providing an additional power supply connection in a city center location. And “power outages” are one of the most frequent causes of unplanned downtime faced by on-premises data centers.
Assuming 90% service availability, for example, is not satisfactory for Fintech companies. The percentage actually means assuming a period of unplanned downtime of more than 3 days per month, and annually comes to 36 days, 5 hours and 22 minutes, according to the Uptime Institute. Increasing to 99.9% reduces the duration to 43 minutes monthly and 8 hours 41 minutes annually. However, reaching this level requires substantial investments, both in the area of hardware & software, as well as in human resources. However, finding specialists in this field is difficult, with the Data Center industry facing a critical shortage of qualified personnel, both locally and internationally.
Migrating to data centers operated by specialized service providers eliminates all these problems. They have the advantage of having redundant infrastructures from the start – not only of power supply, but also of electro-backup, cooling, etc., as well as specialists in their operation and maintenance. Thus, Fintech companies can opt for the desired level of availability, depending on the specific requirements and the available budget. Moreover, they have the contractual guarantee of its insurance, an advantage they cannot benefit from when operating in on-premises infrastructures.
Flexible Disaster Recovery options
Computer attacks and downtimes can affect in the long term the level of availability of services provided by Fintech companies. Which translates into direct financial losses – if you want to find out how much an unplanned outage can cost you, you can use the Downtime Calculator, missed business opportunities, lost customers and damaged image.
Preventing situations of this type requires adopting a proactive Disaster Recovery strategy. Which must exist not only on paper, but also in practice.
However, this is out of reach for many Fintech companies. Securing an external site that allows business operations to resume as quickly as possible involves a considerable financial effort, a specific logistical organization and, again, specialized personnel.
Data Centers operated by specialized providers – such as M247 – have included such options in their offer, allowing customers to set their own Recovery Point Objective (RPO) and Recovery Time Objective (RTO) indicators according to specific needs.
The future of financial services is likely to be characterized by continued innovation, increased competition, and tighter regulations. To meet these challenges, more and more fintech companies will choose to run their applications from data centers operated by specialized providers. It’s the choice that allows them to improve efficiency, reduce costs, optimize risk management, and increase compliance.
The M247 Data Center allows you to get all these benefits, with predictable costs. For more details you can contact us at office@m247.ro.
