[PDF] Aerospike - Why Financial Services Should Look to NoSQL

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Why Financial

Services Should

Look to NoSQL

Copying or distribution without written permission is prohibited 2

Executive Summary

anongoingprocessforthepastfewdecades.

Thetransitionhasnotalwaysbeensmooth

andeasyfromlegacymainframesystemsof adoptingdigitalchannelstoaccessbanking servicesandotherofferings.Neobankshave launchedthatarecompletelydigital, withouthavinganybranchbanking.

Financialservicescannolongeroffergeneric

solutionsthattargetawiderangeof consumers.Beitanindividualworkingina multinationalcorporationorastudent,a neighborhoodbusiness,oralarge-scale enterprisecateringtoaglobalpopulace,the needsofeachclientareunique.Toaddress frommultiplesourcesinsideandoutsidethe enterprise.Theseincludestructureddata fromsourceslikeenterprisesystems,market systems,andgovernmentdatabases,aswell asunstructureddatafromsocialnetworks andmedia.

Theemphaticacceptanceofmodern

platformsandtechnologiessuchasNoSQL databases(whicharepoweringtechgiants likeFacebook,Amazon,andGoogle)has providedtheopportunitytotacklethese challengeseffectively.Thisreportexplores thevariousfacetsofNoSQLdatabasesand howtheirgrowthhasplayedacrucialrolein transformingseveralfinancialservices businessareas.FinTechcompaniessuchas neobanks,onlinetradingplatforms,and paymentplatformsarealreadyincorporating

NoSQLdatabasesintheirarchitecturesand

arereapingthebenefitsofbeingagileand resilient.

Thisreportalsoinvestigatestheseveral

advantagesthatNoSQLoffersover traditionaldatabasesforafinancial institution.Theabilitytohandlestructured andunstructureddataformats,easeof connectinglegacysystemswithnew, speedierfront-endsystems,horizontal scaling,andfasterimplementationaresome analyzeshoweachoftheseadvantages translatestobetterperformanceinthe variousfunctionsofafinancialinstitution rangingfromfraudprevention,better customerserviceandcustomer360,targeted marketing,dataanalytics,andreal-time digitalidentityverification. tomoveoperationalanddeliverymodelsfrom physicaltodigitalplatformsasmoreand morecustomerspreferthesechannels.

NoSQLwillplayacriticalroleinenabling

thisshiftandinensuringthehighqualityof servicesthattheirnew,digitalclientele expectsfromthem.

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NoSQL Databases

in the Changing

World of Financial

Services

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Digital transformation in financial

services and the changes imposed by it versedintheselegacysystems.

OtherIssueswithBankingLegacySystems

ATMs,BACS,andinternationalcardpayments.

ofthecost.

NoSQL Databases in the Changing

World of Financial Services

COST procurement.

CHANGEMANAGEMENT

BREAK-INOPERATIONS

SKILLEDMANPOWER

effectively.

Issues faced

in changing these legacy systems: Copying or distribution without written permission is prohibited 5

Many banks are still struggling with

shifting from the legacy systems and are severely behind the curve.

Neobanksare hot on the heels of

traditional banks, and with more digital avenues available, customers will be frequenting physical branches even less. This is the time for banks to go all out in technology adoption and ensure that they usher in a new era in innovation and customer satisfaction.

WhatisaNoSQLdatabase?

disparatedatasources.

NoSQL Databases in the Changing

World of Financial Services

Copying or distribution without written permission is prohibited 6

Types of NoSQL databases

access,anddataaggregation.

Columnar Database

theoppositeendoftherelationship. operations,andsocialnetworks.

Graph-based NoSQL Database

betterperformanceandcanbeeasilyscaled.

Key-value store NoSQL Database

Document Store NoSQL Database

NoSQL Databases in the Changing

World of Financial Services

Copying or distribution without written permission is prohibited 7 users.

As per a report from Allied Market Research,

The global NoSQL market is expected to reach

$22.08 billion by 2026.

The industry is expected to grow at a

CAGR of 31.4%(2019-26) 1.

Growth of NoSQL databases

NoSQL Databases in the Changing

World of Financial Services

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Where NoSQL

Databases Fit

in Financial

Services

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Someapplicationsneedsimpleobjectstorage,

whereasmanyothersrequirehighlycomplexand providetherequiredsupportforarangeofdata complexhierarchicalstructures.

Where NoSQL Databases Fit

in Financial Services

NoSQL databases are better

equipped to handle larger data sets model.

NoSQLdatabasesareincreasinglybeingused

forBigDataanalysis.ThisisbecauseNoSQL databasestypicallyfollowtheBASEapproach insteadoftheACIDapproachofrelational databases(althoughthisisnowbeginningto change).BybeingBasicallyAvailable(BA),it changeovertime,andEventual(E)consistency ensuresthatthesystemwilleventuallybecome scalability.

NoSQLdatabasescanhandlesmallerbinary

informationvaluescanalsobehandledbykey- valuesystemswithcomplexdatatypesorbe

Awebofinterrelatedinformationcanalsobe

storesinaNoSQLdatabase. modelofthedatabasewouldbeenoughtofulfill thebusinessrequirements.However,current trendsdemandjusttheopposite:storingand processingunstructuredandunpredictable orincreasingnumberofusers,RDBMSusingSQL sufferfrommajorperformanceandscalability dataprocessingmoredifficult.

RDBMScannotbeconsideredthebestsolution

forallsituationsastheycannotmeetthe increasinggrowthofunstructureddata.

Traditionaldatabasescannotprocess

unstructuredandunpredictableinformation.

However,modernapplicationsdemandan

Ease of handling both

structured and unstructured data formats

Ontheotherhand,NoSQLisaflexibleand

cloud-friendlyapproachtoprocess unstructureddatawitheasedynamically.With theavailabilityofseveralmobileandweb applications,itisverycommonforfinancial institutionstohavemillionsofuserswhowill generatealotofunstructureddata.

NoSQLdatabasessimplifytherepresentation

JSON(JavaScriptObjectNotation)format.In

thedynamicschemauniversewherechanges theoutdatedstaticschema.

Web-basedenterprisessuchasAmazon,

Facebook,andevenmodern-dayneobanks,

canmatchupwithchangingdatamodels,thereby themtoworkinrealtimeandofferaunique customerexperiencenotseenbeforeinthe thequicktransferofmoneyandpersonalized servicesorganizationsandneobanksaliketo productsandservicesusingreal-timedata analytics. Copying or distribution without written permission is prohibited 10

Themainpurposeofkeepingadatabasein-

thatisin-memoryistypicallyfasterthandata storedonaflashdriveoradisk.Asaresult,the userdoesnothavetowaitfordiskI/Oinorderto

Where NoSQL Databases Fit

in Financial Services

High-performance handling

designed for real-time feedback at web-scale legacysystemsforvariousfunctionsintheir amountsofdata,andtheprocesstoconvertthem involveshumongouseffortandhighcosts.Asa retainthesesystems.However,theyworkwith moderndatabasesinareassuchasfront-end operationsthathavealotofweb-based interactions.NoSQLoffersapowerfulwayto monitorkeyperformanceindicatorsinreal- time,whichhelpswithdecision-making,SLA adherence,andforecasting. needtheperformanceofNoSQLdatabase structures.Thishelpsensurethatdecision- mostrelevantandtimelyinformationwhen interactingwithacustomer,vendor,orthe managementintheirowncompany.Withthis anaccuratepicturetotheconcernedparties ratherthanhavingtowaitforinformationtobe returnedorbasingtheirdecisiononoutdated enterprisesusingtoolssuchascustomer relationshipmanagementsolutions.

Forin-memorysystems,dataisaddedtothemain

structures.Thisdataisalwaysavailablein- writedatasoquicklyandefficientlyinanin- canbemuchslowerandtendtobogdownlegacy in-memoryNoSQLsystems).

Built to connect legacy

systems with newer and faster front-end systems

Firms have tokeep the following points in

mind while linking legacy systems with

NoSQL databases:

1.Identify integration points in the

legacy stack, as integrations can happen at the Object Relational

Mapping or database layer without

any additional overhead

2.Ensure there is a strong architecture

in place to enable the seamless integration of NoSQL and in-memory computation systems languishindatawarehouses.However,witha

NoSQLdatabaseinplace,thatsameinformation

beutilizedthroughNoSQL. Copying or distribution without written permission is prohibited 11 technologieshasgreatlychangedmarket digitalandphysicalworlds,andchanging achievesuchascenario,onethatallowsweb- scaleinnovationinorderthattechnology teamscanmeetchangingbusiness

Where NoSQL Databases Fit

in Financial Services

Built to drive two-paced

development of modern architectures

NoSQLdatabasesmanagetheshardingofa

toaddinexpensiveserversandconnectthemto thedatabasecluster,makingthemworkasa needforasinglepointoffailureinaNoSQL database.Providingdurabilityandhigh availabilityofaNoSQLdatabasebyusingless expensivehardwareandstorageisoneof

Inarelationaldatabase,wewouldneedto

purchasemorepowerfulandthusincreasingly weweretoincreasetheamountofdatastorage, wewouldhavetoincreasethecostofthe hardwareneededaswellsubstantially.

Can scale better horizontally

as the data grows

Easier and faster to

implement compared to traditional databases

NoSQLdatabaseshaveincreasedinpopularity

withtheriseofBigData-basedapplications.

Unlikerelationaldatabases,NoSQLdatabases

aremuchcheapertoscale,capableof managingunstructureddata,andbetter suitedtothecurrentagiledevelopment approaches.TheadvantagesofNoSQL relationalsystemcanbedaunting.

NoSQLdatabasesareoftenopen-source;users

candownloadthesoftwareandbuildtheir

Theyarealsoinexpensiveandeasilyavailable

acrossmultiplesoftwarevendors.NoSQL databaseimplementationiseasyandtypically usescost-effectiveserverstomanage explodingdataandtransactions.Incontrast,

RDBMSdatabasesaremoreexpensiveanduse

bigserversandstoragesystems.Hencethe thecaseofNoSQLcanbemanytimeslessthan thecostofanRDBMS.

Theperformanceofarelationaldatabasemodel

canbeenhancedwithmorepowerfulhardware.

However,asdiscussedearlier,thisprocessis

costlyandtime-consuming.Thecontinuous upgradeprocessofhardwareistheproblemthat

NoSQLdatabasesaretryingtosolve.Insteadof

havingtopurchasenewserverswithmore memory,NoSQLdatabasesapplyascale-out modelwherewecaneasilyaddnewserversto investment.Thisbenefitalonemakesitworth consideringNoSQLformanymodernusecases. ithasbeenobservedthatmanyusecasestodaydo transactions,whichiswhyNoSQLworkssowell, incomparison.Also,sinceNoSQLdatabasesuse adenormalizedmodelinwhichallinformation aboutanentityispresentedinasinglerecord,

Support for better

performance handling

12Copying or distribution without written permission is prohibited

Opportunities and

Business Benefits

That Can Be

Derived from

NoSQL Databases

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Opportunities and Business Benefits That

Can Be Derived from NoSQL Databases

Theglobalfrauddetectionand

preventionmarketsizestoodat$19.90 billionin20194andisprojected toreach$110.04billionby20265.

Thisrepresentsarecognitionthatfraud

isbecomingincrediblychallengingand canonlybeaddressedwithcutting-edge technology.

RSAreportsa600%increaseinmobilefraudover

theplatformisonlygoingtoincrease.

Thesedays,frauddetectionishandledby:

Analytics

Predictiveclassification

Clustering

complementtheirexistingarchitecture. processing. $110 B $19 B

20192026

havemassivebusinessimplications. Copying or distribution without written permission is prohibited 14

Real-timedigitalIDvalidation

Opportunities and Business Benefits That

Can Be Derived from NoSQL Databases

In2021,cybercrimedamagescouldreach

bytheWorldEconomicForumidentifiedcyber- relatedissues,suchascyberattacksanddata risksglobally. $6 Tn customersagainstanti-socialelements. Personalized offerings using improved real-time data analytics theirneeds. customer. Copying or distribution without written permission is prohibited 15

Targeted marketing

Opportunities and Business Benefits That

Can Be Derived from NoSQL Databases

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Pre-trade assistance

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Conclusion

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Conclusion

Technologyisgoingtoplayamassivepartin

thenewenvironmentforFinancialServices.

Customerswhoareaccustomedtoinstant

updatesthroughsocialmediawillexpecta

NoSQLdatabasesbringimmensevalue

whenanenterprisehastoaccessand analyzemassiveamountsofunstructured dataordatathatisstoredremotelyon virtualserverswithinthecloud.NoSQL databaseswillbeoneofthepioneering comingyears,enablingthemtosucceedin thedigitalenvironment.

Asfirmsaroundtheworldlookatcost-

effectivemeasurestorunbusinesses, technologywillbethemainfocus.Withthe growthindata,itwillbecomeuneconomical forfirmstospendonscalingdatabases verticallybyaddingmorecomputeand storagecapacity.

Instead,withNoSQL,applicationscanstore

theirdatainpurpose-builtdatabases, whichisespeciallytrueinthecaseof unstructureddata.Thiswillalsoaidinquotesdbs_dbs14.pdfusesText_20

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