Banks and financial institutions are under more pressure than ever to transform themselves. However, like many other sectors, digital transformation in financial services is prone to failure.
According to McKinsey, only 30 percent of banks that have undergone a digital transformation report successfully implementing their digital strategy, and the majority fall short of their stated objectives. More than half exceed their initial timeline and budget.
For the oldest banks and financial institutions, digital transformation has become a necessity to keep up with the digital world. The rise of digital-only banks, which operate essentially like tech companies, has meant that traditional brick-and-mortar banks that fail to innovate with their digital business risk falling behind. Consumers who are used to interacting with everyday organizations through digital interfaces will quickly leave any institution that fails to offer the customer experience they would expect from their usual online services.
In addition, the sector is heavily regulated. Not only do financial service companies have to ensure they store and process customer data according to regulations like GDPR and local variants like California’s Consumer Privacy Act (CCPA), but they must follow a wealth of regulations to protect consumers and retain financial stability, with new legislation such as the Digital Operational Resilience Act (DORA) being introduced regularly.
“Though DORA does not apply unless they operate in the EU, banks operating in the United States must satisfy the demands of all manner of regulators, including the Federal Financial Institutions Examination Council (FFIEC), New York State Department of Financial Services (NYDFS) and Federal Reserve to name a few. For instance, the US Government has encouraged the use of Software Bills of Materials (SBOMs) to strengthen supply chain security, where purchasers require vendors to provide written records of all third-party code and dependencies within software.”
- Gordon Cooper, Account Executive at Ardoq, ex-VP of Architecture at American International Group, 30+ years of experience working in EA software
All this adds up to organizations needing to be able to adapt quickly to changing circumstances while maintaining resilience in a highly regulated industry. Some financial organizations using Ardoq to power their digital transformation efforts include:
- IG Group
- Mitsubishi UFJ Financial Group (MUFG)
- Ontario Municipal Employees Retirement System (OMERS)
- Sicredi
- Washington State Employees Credit Union (WSECU)
“There is a slow pace of change in the financial sector because banks are risk averse to new systems. Once something is working, they are loath to update it because the change management process is so rigid.”
Chaz Jackson, Customer Success Manager at Ardoq
MUFG: Providing a Holistic View of True Current State
Mitsubishi UFJ Financial Group is Japan’s largest financial group and the world’s ninth-largest bank by assets. As a foreign-owned bank operating in the US, MUFG is highly regulated. Their architecture review process, application onboarding, lifecycle management, and risk control framework must be as strictly adhered to as possible and are often audited.
Ardoq was the only system MUFG evaluated that allowed them to present their current state architecture based on discovered assets and interfaces. With a handle on their true, current state, the bank was able to present proposed changes and the associated risks or value they added to the business in real time.
“Ardoq has been responsive to the requirements of our highly regulated business and are keen to use client feedback to prioritize their backlog. I'm currently using Ardoq to effectively document/visualize a capability-based approach to our enterprise data strategy. Its ability to create multi-dimensional relationships from business requirements to capabilities and tools, along with their maturity assessments, helps to provide a holistic view of our organization's technology maturity, strategy, and roadmap.”
- Amy Sacchetti, Director of Technology Strategy, Governance & Architecture, MUFG Americas
OMERS: Future-Proofing the Business With Application Portfolio Management
As one of Canada’s largest defined benefit pension plans responsible for managing the retirement benefits of all local government employees in the province, the Ontario Municipal Employees Retirement System (OMERS) needed to engage in digital transformation to remain cutting-edge and responsive to business demands.
The 60-year-old organization, which managed $105 billion in net assets from 500,000+ members in 2020, is organized between four lines of business (LoBs), each with its own architecture design and suite of applications. Although they were developing strategies for business improvement, the EA team was not involved in executing them, leading to silos. The team also lacked the tooling needed to execute its strategic ideas, using Excel to build capability models and a limited tool for application portfolio management.
Adopting Ardoq allowed the team a clear view of each application in the company’s tech stack, how they interacted with the others, and who used them. They were able to identify unnecessary applications that had overlapping capabilities and whether they delivered value to individual LoBs or the business as a whole, providing a fact-based approach to removing legacy applications and reducing wastage.
The team used Ardoq to easily generate visuals that could be used to communicate the value of EA to the wider business and remove those silos between departments.
Learn more about how OMERS used Ardoq to take control of its organizational infrastructure.
Improving Operational Resilience at an Exchange and Clearing Organization
Operational resilience is a must in a highly regulated environment like finance, especially with the upcoming Digital Operational Resilience Act (DORA) placing strict requirements on financial institutions operating in the EU to be compliant by 2025.
The resilience team in this exchange and clearing organization needed to understand the potential impact of technical glitches, cyberattacks, and system failures, but this was not an easy undertaking in a business with complex infrastructure and many independent systems. They lacked insight into ownership and interdependencies.
Through Ardoq, they were able to document business services, their dependent processes, and the resources they rely upon. Visualizing these dependencies provides them with a full overview of their digital real estate, facilitating better impact analysis for their incident and change management teams.
In order to gain the information from across the business they required, the team had to foster a culture of collaboration. They used Ardoq’s Surveys and Broadcasts features to do this, encouraging democratization and assigning ownership of data so that each piece of the organization takes care of a different piece of the overall digital estate. Using Ardoq Discover, experts across the broad spectrum of business are able to contribute their insights and knowledge, whether they’re in technical or non-technical roles.
From this, the team is able to build up a strong picture of the as-is with all necessary processes, applications, and dependencies. They can then perform impact analysis by asking what would happen in scenarios where critical components are unavailable.
“We’re already seeing value. We have a strong baseline of metadata to inform wider processes outside of Ardoq — all these are fundamental for increasing resilience, understanding interdependencies, and ensuring ownership.”
- Distinguished Engineer, Exchange and Clearing Organization
Read the full story about this organization’s operational resilience journey.
Ardoq Empowers Digital Transformation
It’s not just digital transformation in financial services that benefits from Ardoq. Organizations across the world, both public and private sector, rely on us as their enterprise architecture tool of choice. We're committed to having the customer at the heart of everything we do. We are proud to be recognized in the 2024 Gartner® Peer Insights Voice of the Customer for Enterprise Architecture Tools report.
