07th December 2015
The financial services sector is in search of a cloud strategy. Here's why the hybrid cloud is the right cloud for banks and insurance firms.
According to a recent survey from the Cloud Security Alliance, the financial services sector is currently "in search of a cloud strategy". Historically, banks and insurance firms have been slow to warm up to the benefits of cloud computing more so, say, than manufacturers and retailers. Today, the tide is turning.
However, the survey also turned up some telling insights into what the financial services sector's fledgling cloud strategy actually looks like. None of the 100 plus respondents were planning to use the public cloud, while fewer than a fifth (18 per cent) intended to go fully private. But almost half (47 per cent) expected to use "a mix of inhouse IT, private and public clouds" what most of us would describe as a hybrid deployment model.
This makes sense, because in many ways, the hybrid cloud is the right cloud for banks and insurance firms. These are organisations that are enormously datadriven, but their systems vary wildly in terms of whether they're suited to costeffective public cloud delivery or would be better off deployed onpremise. The hybrid cloud unlocks the best of both worlds, allowing firms to optimise for performance, compliance and cost all at once.
Consider the following, for example:
Security and compliance
The term financial services is used to describe a number of different markets, but one thing most players have in common is that they're highly regulated. Not all public clouds or even private ones are compliant with data protection laws and standards like PCI DSS. So, even as cloud computing matures, there's a need for inhouse IT to store and process particular data types.
The hybrid cloud allows organisations to keep this infrastructure up and running, but also use more costeffective clouds for nonregulated and less sensitive data.
As mentioned above, banks and insurance firms are enormously datadriven. This means that downtime can be massively disruptive, particularly when it renders missioncritical applications and resources inaccessible. With the hybrid cloud, organisations gain the ability to map different workloads to different environments, ensuring that their individual availability requirements are met in servicelevel agreements and that proximity won't be a barrier to efficient disaster recovery.
Beyond cost, one of the benefits of the public cloud over private and inhouse IT is that scalability generally isn't an issue new capacity can be procured in a matter of minutes, whereas with onpremise infrastructure it could take days or even months to deploy a new server.
Again, because the financial services sector is so datadriven, this is a major selling point for the hybrid cloud it allows firms to accommodate growing volumes of nonregulated data with relative ease.
Integration with legacy systems
Many banks and insurance firms continue to rely on onpremise legacy systems that have been in use for years and years, and it's not always feasible or costeffective to migrate these services to the cloud. A hybrid deployment model allows organisations to maintain and support legacy systems alongside cloudenabled ones, keeping older technology up and running without committing to additional data centre buildout.
Finally, the scalability offered by the cloud can also help the financial services sector to innovate more effectively, rolling out new products and services in a fraction of the time it would have taken previously. Public clouds can be used as lowcost and quick-to-procure testing environments, giving IT teams the ability to develop new solutions in an agile and responsive way. When these solutions go live, they can be moved to onpremise or private cloud infrastructure and therefore meet needs around security, compliance and availability.