Forecasting is a hybrid of the cloud for banks

Banks are turning to the cloud as part of their digitization efforts, more purposefully and faster than ever before. Ultimately, they are transitioning from long-established monolithic systems and removing concerns around regulatory compliance, security, and skills availability, and welcoming the transition. and the advantages due to cloud.

In doing so, banks can use the latest cloud-native technologies, combined with the domain skills they’ve built over the years, to make strides in meeting the challenges difficulties posed by new age financial technology companies born in the cloud. They will have access to flexible and scalable IT infrastructure built on agile principles that will enable them to meet the growing needs of modern banking and customer operations by how to quickly turn around innovative, personalized services.

The complexity of being overloaded during peak season will be a thing of the past as dynamic elastic scalability and rapid availability of the cloud help banks navigate high transaction loads. points without compromising the quality or seamlessness of the customer experience. At the same time, infrastructure operating costs will certainly be reduced when it comes to management and maintenance.

Public or private cloud?

Decided to go with cloud, the next question that banks face is: Which deployment model to choose? What works better: single cloud or conspiracy cloud; public or private?

In a recent study of cloud adoption, we found that 41% of banks use a private cloud, while 28% use a public cloud. Both models have their own advantages and limitations. The public cloud model excels in situations where scale, flexibility, on-demand compute, and flexible scalability are paramount. Latency, governance, data storage, and other areas of compliance can cause problems here.

On the other hand, the private cloud model is the better option when security, control, compliance, and customization override other requirements.. However, they may experience compatibility issues with some legacy apps and capacity expansion.

Or a combination of both?

This is one of the reasons why banks are now more accepting of a combination of the two models. Even large and mid-sized financial institutions that previously only opted for the private cloud are now ready to use the public cloud to house their smaller, non-core applications. In the previously mentioned study, 31% of respondents are using a hybrid approach: A successful combination of on-premises, private, and public cloud models promises scalability, efficiency, and performance. results and technological capabilities that endure over time.

Here, banks can choose to keep legacy systems, not cloud-ready, on their premises. At the same time, their technology decision makers can find the ideal combination of applications that can be delivered across private and public clouds depending on the right use cases. best with their needs.

While they are making these decisions, it is important to evaluate the additional benefits of a multi-cloud arrangement. Banking institutions can reduce the risk of vendor lock-in and switch between cloud service providers to seamlessly meet business and market requirements. They can choose the most suitable cloud provider for each workload and have more opportunity to negotiate terms because they have multiple providers.

It will also prepare them for the future when regulations are expected to go into effect, making it necessary for banks to use multiple cloud providers. The Google Cloud Report 2021 reflects this shift in mindset: 88% of the respondents are adopting a multi-cloud strategy.

The importance of hybrid, multi-cloud in digital transformation

This approach is the most feasible to modernize and be future-ready. However, banks will inevitably encounter complexity that can affect interoperability and seamlessness in the cloud environment. There are inherent challenges as the application tier and the data tier are distributed in different cloud environments. Other factors, such as heterogeneity of models and lack of standardized data replication tools across cloud service providers, will also lead to compromised results.

Therefore, we recommend banks to use cloud-based, non-cloud-based solutions so that they can easily transition to a multi-cloud setup. This allows them to find the most suitable supplier, and the data configuration allows for seamless operation. Alternatively, they can choose to deploy in a container to ensure automated application development contributes to overall efficiency.

Undoubtedly, banks will benefit greatly from moving to the cloud with a hybrid solution, multi-cloud approach. However, rather than go all-in on investing in the cloud, they should follow this path of change wisely with careful planning to optimize the many advantages it offers. They can then expect greater benefits beyond cost effectiveness, business resilience, advanced analytics, and the ability to deploy, automate, and innovate more quickly.

Armed with this, they can focus on delivering the ultimate customer experience while navigating through transactions at scale.

Kalambur Venkatraman is an experienced engineering executive who served as Vice President of Product Architecture at EdgeVerve.