In a recent FIS white paper on current trends in energy, we concluded that a key to the ability of players in the industry to adapt to change will undoubtedly be technology adoption, led by digitalization and automation. In fact, this is exactly what FIS has observed as a business as energy firms have often first focused on data and ensuring that that data is properly managed. Some firms have gone so far as to hire chief data officers and data analysts to set data management strategy and ensure that this valuable resource is both properly managed as well as readied for further extraction of business value via artificial intelligence (AI) and other new technologies.
live in the era of “big data.” In energy, more data than ever is now accessible partly as a result of regulations aimed at ensuring transparency. That data can be structured or unstructured and can range from sound recordings, to images and documents and much more. As firms have adopted the cloud, many have set up data lakes in the cloud to store data for further use. As technologies and tools around data visualization and data mining have become increasingly mainstream, strategies have been developed to mine and extract business value from this data. Additionally, much of the push-around data, especially more real-time data, is being driven by trading concerns, as the need for speed and fast decision-making increases. The use of bots to trade algorithmically at speed is one example of how data and technology have come together in recent years in energy trading. Using AI to automate and optimize trade strategies around interruptible generation is yet another. It remains early days in terms of unlocking the value inherent in the data.
As energy firms look to digitalization, the first step is usually around data and its management. This means understanding how data is generated through business processes like trading and risk management, ensuring that data is auditable and of good quality, what is raw data and what is derived data and so on. Many energy companies have now started on the next phase, which is to procure, build and deploy the infrastructure needed to process that data, exploit value and generate incremental profits. This also involves strategy and careful consideration of not just technology but also of business processes, and FIS has seen how risk as a service, for example, now appeals to firms who see this as a way to access expertise, processes and IT at a reduced cost with more business flexibility.
As many of the larger energy companies have started looking to the cloud, others have also followed suit. Moving applications to the cloud can provide a more flexible and cost-effective way to manage some or all activities more efficiently and many now procure Energy Trading and Risk Management and other solutions in the cloud for exactly this purpose. Configuring infrastructure and applications to provide greater agility in a rapidly changing world is a key requirement for energy companies today.
Optimization is yet another area that is getting much more attention in the new world of energy; for example, as energy is increasingly being generated from intermittent renewable sources, energy companies are also looking at how to optimize assets (generation and storage) and processes (trading strategies and dispatch). Optimization is often via automation and AI, in order to manage the greater risks that this inevitability brings to the business. Again, much of this needs to be performed in real time or very close to it.
While FIS’ white paper looked at the trends in energy and concluded that change might be the only constant, it also begs the question: How will energy firms deal with and adapt to this change? We think that technology will continue to play an increasingly critical role in adapting to change.
READ THE WHITE PAPER
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