Exciting opportunities for transformation in the Financial Services industry sparked an insightful conversation I had with Ed Fandrey, Vice President of Financial Services US at Microsoft. Keep reading to learn how we aim to meet FinServ’s evolving analytics demands through the new strategic partnership between SAS and Microsoft.

Financial Services companies pride themselves on being resolute, strongly rooted in their sometimes centuries old practices. It is part of their DNA. But isn’t the longevity of DNA predicated on its ability to adapt and evolve in any environment?

Ed Fandrey and I explored the top challenges faced by FinServ firms as they endeavor to meet customer expectations, regulatory demands, and fierce competition from digitally native newcomers. Through SAS’s Viya platform, natively integrated on Microsoft Azure, we are ready to equip these companies with the scale, security, and insight they need to adapt and lead in a rapidly evolving financial marketplace.

The new, dynamic environment

Shortly after COVID surfaced in the United States, one of our customers received a massive influx of credit applications. The volume of applications almost forced the company to shut down that valuable channel. However, within 48 hours, SAS was able to respond by integrating the right data and making real-time decisions at the time of applications. Our analytics engines gave the customer the proven capability to leave their important channel open, while ensuring they had appropriate risk coverage.

That is just one of many stories of how robust data analytics are helping Financial Services firms rapidly adapt to a new, dynamic market environment. It’s not just COVID that’s driving transformation—consumers are demanding seamless digital experiences, employees want to work with advanced tools and technologies, and, as the world’s data grows exponentially, inadequate data management is causing obstructive inefficiencies.

Ed Fandrey has worked at Microsoft for over 20 years, and currently leads the Microsoft Financial Services business comprised of cap markets, banks, and insurance companies. He remarked that one of his customers spends almost $1 billion a year on AML (anti-money laundering) because their systems are siloed and data is everywhere. “I actually don’t think—if they had a great solution in place—it would cost that same amount,” Ed predicted, going on to illustrate how “managing the complexity and scale, being able to pull disparate data together, and doing it without hands on keyboards—which are not only prone to error, but get in the way of the efficiencies—those capabilities are really where the cloud is built for Wall Street.”

Too often, FinServ companies throw bodies at processes like AML and become overwhelmed by an operational focus. With robust analytics engines running in the cloud, those same companies can start looking at alternative approaches using machine learning or artificial intelligence—whether it’s applied towards creating operational efficiency with the way they source and aggregate their data, or it’s machine learning, which takes a risk based approach to what they would need to review.

On top of data inefficiencies, Ed noted, rising consumer expectations are driving a push toward digital innovation in the industry. “Customers are voting with their trust in digital platforms,” and Wall Street’s response is ‘are they competitors, are they partners, do we acquire them, do we build our own Fintech?’ I think that gives some insight into where the industry is going, and where they are being pushed from a customer point of view, which is ultimately what they’re trying to impact.”

The challenge, then, for Wall Street (and all financial services companies) is to make top-down, organizational changes to their data operations.

The buck stops at the top

The chief barrier to digital transformation in financial services isn’t overworked IT departments or antiquated technologies—it’s the chief officers. Ed put it succinctly, “my experience has shown me that every company will say they want to transform, but not every company wants to change.” The wake-up call for transformational decisions must be “at a sponsor level of the board and the CEO. If you’re eager to transform and if you’re willing to change—that means as much culture as it does digital technology (and you have to do both).”

For those ready to make those top-down decisions, SAS and Microsoft can provide the common building blocks to transformational success—both from a cloud-based architecture and an analytics standpoint. Our partnership gives customers the ability to build out their analytic capabilities and move up the stack. And for organizations that haven’t been able to make the investments in analytic skills, we can build those applications, provide them directly to customers, and manage them as an application service in a wider range of delivery options.

That’s what makes me excited about our collaboration—we can deliver analytics that are embedded into a secure cloud, solving for many of the problems around siloed data and segregated applications. We can improve speed to market by helping customers differentiate as high up on the stack as possible.

Ed agreed, saying “the days of build everything versus buy are over. Why create your own authentication system, why create your own security token system, why do all of these if you can build on top of a world-class one like Azure?”

The bread and butter of retail banks, for example, is managing money and lending—not managing anti-money laundering platforms. We can manage that for hundreds and hundreds of customers, and each and every customer can get the efficiency and effectiveness by outsourcing the management of that platform to us, who have developed a broader expertise in that specific area.

It’s not just an efficiency play, it’s a profit-boosting play. Ed recalled the first years of the cloud, and how everyone published economic calculators that calculated how much the cloud could save a company. And while he agrees that’s a good exercise to run, he argued “the reality is it’s not about saving you $10 million, it’s about putting the idea together and giving you the agility and acceleration to make you $100 million.” Any chief officer would be thrilled by that return on investment. If they create a top-down analytics culture and outsource the management of advanced analytics platforms, they can begin that journey to value creation.

From A to Z

The opportunities of analytics in the cloud are ripe to meet the challenges faced by organizations in the financial services industry. You can break bottlenecks, connect siloes, and make better decisions around risk—while keeping vital business channels open, even in periods of peak usage.

Microsoft and SAS have been building innovative technologies for the financial services sector for years, and we’re putting our experience to good work. “One of the things about Azure,” Ed mentioned, “is that we listen to the industry and understand the regulatory requirements and built a true financial services cloud. From the security, to the regulations, to data sovereignty—we have twice as many data centers as the next competitor and they’re in very strategic areas based on customer demands—that gives those boardroom-level decision makers comfort that they can actually can use the solution.”

He added that, “the SAS solution, then, allows institutions to not have to think about all the disparate data, figuring out how to build it, and figuring out how to integrate it. The great thing about this partnership is it’s not just IP that runs on Azure—it’s more than that. We partnered together to make sure it’s running extremely efficiently, smoothly, and integrated, and you don’t see the seams or any of the pieces.”

Indeed, the integration of the Viya analytics platform with Azure is going to facilitate a much easier path to innovation for SAS solutions, and a much easier path to solving our customers’ challenges. What defines our two companies is the ability to make a difference, to make this world a better place. To work with a partner that shares those values really means that something magical can happen—we can help customers change their DNA and amplify their core competencies.

To learn more, download the free e-book: Reimagine Analytics in the Cloud With SAS® and Microsoft Azure.



About Author

Stu Bradley

Senior Vice President, Fraud and Security Intelligence Practices, SAS

As Senior Vice President of Risk, Fraud and Compliance Solutions at SAS, Stu Bradley leads a diverse team of 700 technology and domain experts in more than two dozen countries in the Americas, Europe, the Middle East, and Asia-Pacific. He and his team help commercial and public organizations leverage the most advanced analytic technologies in the arenas of risk management, AML/CFT compliance, financial services fraud and financial crimes, government benefits program integrity, tax compliance, and public security. Bradley’s risk management and anti-fraud career spans more than two decades. Since joining SAS in 2009, he has served in leadership roles advancing the Risk and Fraud portfolio across four main pillars: Risk Management, Industry Fraud, AML Compliance, and Public Security. He’s declared it his personal mission to help organizations implement a modern approach to stopping crime before it happens.

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