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In-memory Caching in Finance

Big data has been gradually creeping into a number of industries through the years, and it seems there are no exceptions when it comes to what type of business it plans to affect. Businesses, understandably, are scrambling to catch up to new technological developments and innovations in the areas of data processing, storage, and analytics. Companies are in a race to discover how they can make big data work for them and bring them closer to their business goals. On the other hand, consumers are more concerned than ever about data privacy and security, taking every step to minimize the data they provide to the companies whose services they use. In today’s ever-connected, always online landscape, however, every company and consumer engages with data in one way or another, even if indirectly so.

Despite the reluctance of consumers to share data with businesses and online financial service providers, it is actually in their best interest to do so. It ensures that they are provided the best experience possible, using historical data, browsing histories, and previous purchases. This is why it is also vital for businesses to find ways to maximize the use of data so they can provide the best customer experience each time. Even the more traditional industries like finance have gradually been exploring the benefits they can gain from big data. Big data in the financial services industry refers to complex sets of data that can help provide solutions to the business challenges financial institutions and banking companies have faced through the years. Considered today as a business imperative, data management is increasingly leveraged in finance to enhance processes, their organization, and the industry in general.

How Caching Can Boost Performance in Finance

In computing, caching is a method used to manage frequently accessed data saved in a system’s main memory (RAM). By using RAM, this method allows quick access to data without placing too much load on the main data stores. Caching also addresses the problems of high latency, network congestion, and high concurrency. Batch jobs are also done faster because request run times are reduced—from hours to minutes and from minutes to mere seconds. This is especially important today, when a host of online services are available and accessible to users. A delay of even a few seconds can lead to lost business, making both speed and performance critical factors to business success. Scalability is another aspect that caching can help improve by allowing finance applications to scale elastically. Elastic scalability ensures that a business is equipped to handle usage peaks without impacting performance and with the minimum required effort.

Below are the main benefits of big data and in-memory caching to financial services:

  • Big data analytics integration with financial models
    Predictive modeling can be improved significantly with big data analytics so it can better estimate business outcomes. Proper management of data helps improve algorithmic understanding so the business can make more accurate predictions and mitigate inherent risks related to financial trading and other financial services.
    Predictive modeling can be improved significantly with big data analytics so it can better estimate business outcomes. Proper management of data helps improve algorithmic understanding so the business can make more accurate predictions and mitigate inherent risks related to financial trading and other financial services.
  • Real-time stock market insights
    As data volumes grow, data management becomes a vital factor to business success. Stock markets and investors around the globe now rely on advanced algorithms to find patterns in data that will help enable computers to make human-like decisions and predictions. Working in conjunction with algorithmic trading, big data can help provide optimized insights to maximize portfolio returns. Caching can consequently make the process smoother by making access to needed data easier, quicker, and more efficient.
  • Customer analytics
    Understanding customer needs and preferences is the heart and soul of data management, and, ultimately, it is the goal of transforming complex datasets into actionable insights. In banking and finance, big data initiatives focus on customer analytics and providing the best customer experience possible. By focusing on the customer, companies are able to Ieverage new technologies and channels to anticipate future behaviors and enhance products and services accordingly. By building meaningful customer relationships, it becomes easier to create customer-centric financial products and seize market opportunities.
  • Fraud detection and risk management
    In the finance industry, risk is the primary focus of big data analytics. It helps in identifying fraud and mitigating operational risk while ensuring regulatory compliance and maintaining data integrity. In this aspect, an in-memory cache can help provide real-time data that can help in identifying fraudulent activities and the vulnerabilities that caused them so that they can be avoided in the future.

What Does This Mean for the Finance Industry?

Big data is set to be a disruptor in the finance sector, with 70% of companies citing big data as a critical factor of the business. In 2015 alone, financial service providers spent $6.4 billion on data-related applications, with this spending predicted to increase at a rate of 26% per year. The ability to anticipate risk and pre-empt potential problems are arguably the main reasons why the finance industry in general is leaning toward a more data-centric and customer-focused model. Data analysis is also not limited to customer data; getting an overview of business processes helps managers make informed operational and long-term decisions that can bring the company closer to its objectives. The challenge is taking a strategic approach to data management, choosing and analyzing the right data, and transforming it into useful, actionable insights.

Turbocharge Business Analytics With In-memory Computing

One of the customer traits that’s been gradually diminishing through the years is patience; if a customer-facing website or application doesn’t deliver real-time or near-instant results, it can be a reason for a customer to look elsewhere. This trend has pushed companies to turn to in-memory computing to get the speed needed to address customer demands in real-time. It simplifies access to multiple data sources to provide super-fast performance that’s thousands of times faster than disk-based storage systems. By storing data in RAM and processing in parallel against the full dataset, in-memory computing solutions allow for real-time insights that lead to informed business decisions and improved performance.

The in-memory computing solutions market has been on the rise in recent years because it has been heralded as the platform that will accelerate IT modernization. In-memory data grids, in particular, show great promise because it addresses the main limitation of an in-memory relational database. While the latter is designed to scale up, the former is designed to scale out. This scalability is one of the main draws of an in-memory data grid, since a scale-up architecture is not sustainable in the long term and will always have a breaking point. In-memory data grids on the other hand, benefit from horizontal scalability and computing elasticity. Scaling an in-memory data grid is as simple as adding nodes to a cluster and removing it when it’s no longer needed. This is especially useful for businesses that demand speed in the management of hundreds of terabytes of data across multiple networked computers in geographically distributed data centers.

Since big data is complex and fast-moving, keeping data synchronized across data centers is vital to preserve data integrity. Keeping data in memory removes the bottleneck caused by constant access to disk -based storage and allows applications and their data to collocate in the same memory space. This allows for optimization that allows the amount of data to exceed the amount of available memory. Speed and efficiency is also improved by keeping frequently accessed data in memory and the rest on disk, consequently allowing data to reside both in memory and on disk.

Future-proofing Businesses With In-memory Computing

Data analytics is as much a part of every business as other marketing and business intelligence tools. Because data constantly grows at an exponential rate, in-memory computing serves as the enabler of data analytics because it provides speed, high availability, and straightforward scalability. Speeds more than 100 times faster than other solutions enable in-memory computing solutions to provide real-time insights that are applicable in a host of industries and use cases.

Location-based Marketing

A report from 2019 shows that location-based marketing helped 89% of marketers increase sales, 86% grow their customer base, and 84% improve customer engagement. Location data can be leveraged to identify patterns of behavior by analyzing frequently visited locations. By understanding why certain customers frequent specific locations and knowing when they are there, you can better target your marketing messages and make more strategic customer acquisitions. Location data can also be used as a demographic identifier to help you segment your customers and tailor your offers and messaging accordingly.

Fraud Detection

In-memory computing helps improve operational intelligence by detecting anomalies in transaction data immediately. Through high-speed analysis of large amounts of data, potential risks are detected early on and addressed as soon as possible. Transaction data is fast-moving and changes frequently, and in-memory computing is equipped to handle data as it changes. This is why it’s an ideal platform for payment processing; it helps make comparisons of current transactions with the history of all transactions on record in a matter of seconds. Companies typically have several fraud detection measures in place, and in-memory computing allows running these algorithms concurrently without compromising overall system performance. This ensures responsiveness of systems despite peak volume levels and avoids interruptions to customer service.

Tailored Customer Experiences

The real-time insights delivered by in-memory computing helps personalize experiences based on customer data. Because customer experiences are time-sensitive, processing and analyzing data at super-fast speeds is vital in capturing real-time event data that can be used to craft the best experience possible for each customer. Without in-memory computing, getting real-time data and other necessary information that ensures a seamless customer experience would have been near impossible.

Real-time data analytics helps provide personalized recommendations based on both existing and new customer data. By looking at historical data like previously visited pages and comparing them with newer data from the stream, businesses can craft the proper messaging and plan the next course of action. The anticipation and forecasting of customers’ future actions and behavior is the key to improving conversion rates and customer satisfaction—ultimately leading to higher revenues and more loyal customers.

Conclusion

Big data is the future, and companies that don’t use it to their advantage would find it hard to compete in this ever-connected world that demands results in an instant. Processing and analyzing data can only become more complex and challenging through time, and for this reason, in-memory computing should be a solution that companies should consider. Aside from improving their business from within, it will also help drive customer acquisition and revenue, while also providing a viable low-latency, high throughput platform for high-speed data analytics.

In-memory Data Grid vs. Distributed Cache: Which is Best?

Distributed caching has been a boon for IT professionals in the past due to its ability to make data always available even when offline. However, with the growing popularity of the Internet of Things (IoT) and the increasing amounts of data businesses need to process daily, distributed caching is slowly being overshadowed by a newer and more robust technology solution—the in-memory data grid (IMDG).

Distributed caches allow organizations to combine the amount of memory of computers within a network, boosting performance at minimum cost because there’s no need to purchase more disk storage or more high-end computers. Essentially, a data cache is distributed among all networked computers so that applications can use all available memory when needed. Memory is pooled into a single data store or data cache to provide faster access to data. Distributed caches are typically housed in a single physical server kept on site.

The main challenge of distributed caching today is that in-memory data grids can do distributed caching—and much more. What used to be complicated tasks for data analysts and IT professionals has been made simpler and more accessible to the layman. Data analytics, in particular, has become vital for businesses, especially in the areas of marketing and customer service. Nowadays, there are solutions available that present data via graphs and other visualizations to make data mining and analysis less complicated and quicker. The in-memory data grid is one such solution, and is one that’s gradually gaining popularity in the business intelligence (BI) space.

In-memory computing has almost pushed the distributed cache to a realm of obsolescence, so much so, that the remaining organizations that gold onto it as a solution are those that are afraid to embrace digital transformation or those that do not have the resources. However, this doesn’t mean that the distributed cache is less important in the history of computing. In its heyday, distributed caching helped solve a lot of IT infrastructure problems for a number of businesses and industries, and it did all of that at minimal cost.

Distributed Cache for High Availability

The main goal of the distributed cache is to make data always available, which is most useful for companies that require constant access to data, such as mobile applications that store information like user profiles or historical data. Common use cases for distributed caching include payment computations, external web service calls, and dynamic data like number of views or followers. The main draw, however, is how it allows users to access cached data whether the user is online or offline, which, in today’s always-connected world, is a major benefit. Distributed caches take note of frequently accessed data and keep them in process memory so there’s no need to repeatedly access disk storage to get to that data.

Typically, distributed caches offered simplicity through simple “put” and “get” operations through distributed key/value stores. They’re flexible enough, however, to handle more complicated processes through read-through and write-through instances that allow caches to read and write values to and from disk. Depending on the implementation, it can also handle ACID transactions, data replication, and active backups. Ultimately, distributed caching can help handle large, unpredictable amounts of data without sacrificing read consistency.

In-memory Data Grid for High Speed and Much More

The in-memory data grid (IMDG) is not just a storage solution; it’s a powerful computing solution that has the capability to do distributed caching and more. Designed to use RAM and eliminate the need for constant access to disk-based storage, an IMDG is able to process complex data for large-scale implementations at high speeds. Similar to distributed caching, it “distributes” the workload to a multitude of computers within a network, not only combining available RAM but also the computing power of all available computers.

An IMDG runs specialized software on each computer to enable this and to minimize movement of data to and from disk and within the network. Limiting physical disk access eliminates the bottlenecks usually caused by disk-based storage, since using disk in data processing means using an intermediary physical server to move data from one storage system to another. Consistent data synchronicity is also a highlight of the IMDG. This addresses challenges brought about by the complexity of data retrieval and updating, helping to speed up application development. An IMDG also allows both the application and its data to collocate in a single memory space to minimize latency.

Overall, the IMDG is a cost-effective solution because it all but eliminates the complexities and challenges involved in handling disk-based storage. It’s also highly scalable because its architecture is designed to scale horizontally. IMDG implementations can be scaled by simply adding new nodes to an existing cluster of server nodes.

In-memory Computing for Business

Businesses that have adopted in-memory solutions currently enjoy the platform’s relative simplicity and ease of use. Self-service is the ultimate goal of in-memory computing solutions, and this design philosophy is helping typical users transition into “power users” that expect high performance and more sophisticated features and capabilities.

The rise of in-memory computing may be a telltale sign of the distributed cache’s eventual exit, but it still retains its use, especially for organizations that are just looking to address current needs. It might not be an effective solution in the long run, however, as the future leans toward hybrid data and in-memory computing platforms that are more than just data management solutions.

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