BankingTech FinTech

Head in the clouds

July 15, 2020 at 12:30AM

My cloud journey began around 2006 when the term “cloud” was not part of the business lexicon and it still made me think of rain.  As technology operations manager of the securities sales & trading business unit of a major investment bank, I was forced to ponder over how agile we were in responding to the needs of the business.

The investment in infrastructure had reached levels where additional demand for storage and computing was leading to confrontations. On one hand, there was tremendous pressure from the business to be more responsive to their fast-evolving needs and on the other hand, there was intense scrutiny of cost. Of course, I wasn’t the only one facing this conundrum; this was the scenario pervading the enterprise, and an urgent need arose to build an agile infrastructure that could deliver computing and solutions to the business, and create new software products and services for our customers.

Cloud is no longer an “emerging” technology and most financial services firms have a cloud journey roadmap.

To begin with, the enterprise adopted computing architecture that enabled the bank to run large-scale grid computing. Also, in order to address the needs of a mobile and distributed global workforce that included large vendor offshore development centres (ODCs) at offshore centres, serving a global clientele, the firm invested in a virtual-desktop environment so that the workforce could access the firm’s applications and services wherever they were and whenever needed.

PCs disappeared from people’s desks and the entire computer processing moved to data centres around the globe. Gradually these concepts and principles were adopted into the core business processing procedures, and a uniform architecture for running an internal “private cloud” evolved.

The technology teams could put up requests for infrastructure provisioning through an in-house workflow system that made the whole process much more agile, efficient and transparent. It took about ten years to move most of the distributed workload to the private cloud.

The biggest value drivers of a private-cloud infrastructure were:

  1. Risk reduction: the uniform structure of the private-cloud infrastructure reduced complexity and we could respond to failures more quickly.
  2. Improved agility: automated environment provisioning and management helped reduce launch or update an application from months to days and sometimes even minutes.
  3. Improved user experience: development and engineering teams could focus more on the application development, rather than underlying infrastructure, and end-users’ experience improved significantly as a result.

However, the transition to the new infrastructure platform and the new ways of working wasn’t easy. The complex technology environment, with thousands of critical systems and bespoke in-house applications, carefully orchestrated to serve critical business functions, required meticulous planning, strong change management and reorganisation of technology division. The entire application landscape was brought under the umbrella of an engineering led support organisation to drive the transformation and cloud adoption.

I know that many other enterprises had undertaken the same journey, more or less around the same time, and the process of change still continues. Now the focus has shifted towards public cloud adoption. When we talk about public cloud, one of the biggest challenges is determining how we could put private, sensitive and critical enterprise data and applications on servers and data centres owned and managed by a third-party. The journey from private to public cloud would also be an evolutionary process with an intermediate hybrid state.

The three key factors that always come up in my discussions with our financial services clients are:

Security: it is clearly at the top of the list of enablers for public cloud adoption for financial services firms since they are custodians of sensitive client information. A step by step approach of defining security architecture and classifying data for migration is essential.

Regulations: another critical factor. Local and regional regulations around data access, storage and management must be carefully analysed and considered.

Systemic risk: since there are only a handful of dominant suppliers, large financial services firms are wary of systemic risks that are posed by the cloud infrastructure. As a result, many firms are looking at multi-cloud environments.

Cloud is no longer an “emerging” technology and most financial services firms have a cloud journey roadmap as part of their transformation programmes. With an underlying cloud infrastructure, firms can mine large volumes of enterprise data and can focus on building large, scalable ways of managing business intelligence. The concepts of machine learning and deep learning that rely on data to improve the predictive model accuracy can only be industrialised, if enterprise data is made available. The transition from bespoke to cloud infrastructure would help reduce the frictional middle parts of the IT infrastructure, and create a more seamless, end-to-end solution for end-users. The future of financial services depends largely on enabling a digital community. Every business and technology leader today understands the urgency of moving to a cloud-based infrastructure, even more so due to the prevailing pandemic situation, which necessitates greater scalability and reliability.

The debate and deliberations are no longer about whether to adopt to cloud, but it’s about how to undertake the journey and whether to use private, public or hybrid cloud. A lot of these initiatives will be multi-year journeys that no firm can shy away from.

By Sanjiv Roy, head of banking & financial services transformation (Europe) at NIIT Technologies

Visit NIIT Technologies for more details on financial services infrastructure.

via FinTech Futures –

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