You may not have heard of the term “Silicon Alley,” but I am sure you are aware of the game-changing financial technology that is emanating from it. “Silicon Alley” was initially coined in the mid-1990s as a way to group media startups housed around the Flatiron neighborhood of Manhattan. I hope that doesn’t give you dot-com bubble flashbacks because, now, this same location is a hotbed of investment into fintech and blockchain acceleration that is driving financial digital transformation and touching almost every line of business.
The Future of Silicon Alley and Silicon Valley are Intertwined with Financial Institutions
Partnerships between FIs and fintech players are rapidly on the rise. Fintech companies need to capture readymade customers and have access to core processing platforms while the FIs need the innovation to spur growth and protect being disintermediated from their franchise. To that end, FIs are not only procuring fintech solutions as they would a traditional vendor, but they are also engaging directly with the ecosystem to provide residency, partnership, investment, or outright acquisition.
The natural question is why would Nutanix, a Silicon Valley company focused on driving large-scale enterprise adoption of Hyperconverged and Enterprise Cloud infrastructure, want to put any focus on nascent fintech and blockchain startups? The reason is Nutanix is hungry to be an integral participant in innovation and positive disruption as it is happening. Nutanix delivers a unique platform that provides an optimal, secure and agile environment to iteratively develop and deploy these transformative financial solutions.
Fintech is a Hybrid of On-Premise and Public Cloud Implementation
Resoundingly, the implications are that FIs and fintech players are interdependent in ensuring these solutions are going to be seamlessly adopted by their mutual customers. A successful fintech solution will need to minimally account for and integrate across these component parts:
User Experience (UX)
One of the overwhelming concerns of fintech startups looking to partner with FIs is that they will become hopelessly bogged down by legacy infrastructure and arduous testing and implementation methodologies. This has led fintech providers to advocate for completely utilizing public cloud with a simple API and data sharing agreement in some cases brokered by their cloud provider.
Alternatively, FIs see the solution as inherently requiring a hybrid cloud implementation whereby regulatory, privacy, security and reputational risk will demand tighter on-premise controls, especially pertaining to data usage. These concerns are only heightened with very public and damaging cases of data misuse and security breaches.
Why Hyperconverged Infrastructure is Compelling for Fintech & Blockchain Implementations
Hyperconverged Infrastructure (HCI) can successfully bridge the gap by providing the same speed-to-market, provisioning experience and cost advantages of public cloud with the control and maximum data security of on-premises. Financial institutions looking to develop, pilot and implement fintech and blockchain solutions can build labs and go into production without having to compromise their governance, risk and compliance policies. This is a compelling hybrid cloud infrastructure value proposition that should be considered.