For financial organisations looking to make the move to public cloud, outdated technology is proving to be a significant obstacle.
With the sheer number of regulatory hoops they have to jump through, banks have typically struggled to adopt cloud services at the same speed as other organisations. However, competition against, or partnering with, Fintech and Insuretech start-ups is forcing
traditional financial service companies to invest in new and innovative solutions that can deliver more personalised, ubiquitous and straightforward services.
As the majority of banks and financial institutes are looking to evolve their core system, migration to the public cloud is a natural choice. The adoption of AI, Robotic Process Automation (RPA) and Big Data Analytics tools are becoming widespread, replacing
people-repetitive and data complex tasks. As many of these tools are not as cost-effective when running in a private cloud environment, it makes more sense to adopt public cloud services, which ensure stable and reliable services whilst providing additional
Why the public cloud?
As the name suggests, the public cloud describes cloud services, often storage or applications, which are managed and accessed through a publicly available platform. Its major advantage over private cloud is that it allows enterprises to scale IT resources
rapidly with demand, without needing more on-premise infrastructure and in-house resource to do so. In this way, it can allow organisations to access and compute data with effectively limitless computing power as and when it is required, providing the invaluable
insights into customers that enable truly personalised offerings and services that will ensure a competitive edge in the market.
For context; in the UK at present, 12 out of the top 20 banks have a customer satisfaction score under 70 percent[i], clearly demonstrating the need for
financial institutions to better understand their customers and their needs. Therefore, to meet the evolving customer demand for enhanced digital functionality, financial businesses have two options, private or hybrid/public cloud. They could construct new
self-owned private data centres and infrastructure in-house with the required technical staff to operate them. In this scenario, however, the business only has a finite level of scalability before it will need to invest in even more on-premise hardware to
keep up with demand.
Cloud is a better solution, providing greater future proofing against unknown and dynamic demand patterns and for most, these capabilities can be best leveraged in the short term with hybrid infrastructures – that combine legacy data stored in-house with
scalable compute power from the cloud. Hybrid solutions do however have their own challenges, as TSB found out earlier this year when trying to connect legacy systems to its new service which left 1.9 million customers locked out of their accounts[ii].
Therefore, as digital demands increase, the prospect of public cloud with greater cost-effectiveness and flexibility increases; leaving more capital available for the trading and investments which banks need to offer the returns and interest expected by
Overcoming cloud and legacy hurdles
To implement effective modern IT operations, there are several considerations that financial institutions need to make.
Security is an ongoing concern for financial institutions evaluating the cloud and while public cloud providers offer security measures such as encryption and access management tools, strict regulatory or governance requirements found in the financial services
market sometimes means that organisations choose to keep workloads on premises. With data privacy regulations like GDPR, having data accessible on the public cloud is simply not possible for many organisations. In these cases, they can augment their public
cloud offering by introducing hybrid systems to ensure the security of personal data while also delivering the speed and scalability customers expect from a banking service. Ultimately, regulations are constantly evolving so not developing workarounds to data
security challenges will allow competitors to swoop in with a superior customer experience.
When offering digital services through the cloud, data networks are a key strategic consideration, with a requirement for significant bandwidth on demand with low latency and high reliability. In today’s banking environment, customers simply refuse to tolerate
outages and limited access to services - particularly because there are a plethora of challengers who don’t suffer the same issues. Banks simply need to have a seriously good connection with no failure, latency or transfer time, whether that’s directly to
the customer or via a cloud service provider, they need a network that can adapt to support all the new applications. As outdated network designs and technologies can make the deployment of new applications and service updates challenging, even high-risk and
ineffective, financial organisations need to work closely with network technology experts to get the most out of their connections to the data center.
Whichever way banks choose to engage with increasingly savvy digital audiences, fast, reliable connections to public cloud implementations can provide considerable differentiation in a complex and highly competitive market, where critical apps and data analysis
can mean the difference between sinking or swimming. As public cloud adoption continues to grow, financial organisations must ensure that they remain competitive by ensuring their services provide convenience, security, reliability and scalability to their