Spending on traditional, inhouse IT continues to slide as computing workloads continue to move to the cloud. Expect the migrations to increase. Forrester Research predicts for public cloud infrastructure to grow 35 percent to $120B in 2021. The pandemic has in fact accelerated the Cloud adoption, facilitating much of the remote work environments. As the battle amongst top providers (Amazon Web Services, Microsoft Azure, Google Cloud Platform, Alibaba Cloud, IBM, Cisco, and VMWare) intensifies it is primarily the internet, retail, and finance industry that are currently the primary growth drivers for cloud migrations globally.
What does cloud strategy and its optimization hold for the banks?
Cloud computing will be central to the post pandemic new normal. Public clouds will be more dominant and enterprises, including banks will mitigate cloud lock-in through hybrid and multi cloud strategies.
As Regulation tech. grows in importance, the Big Tech corporations will emphasize open partner ecosystems. Given the proliferation in Data, AI, ML, advanced analytics, as mainstream technologies, Banks are at various confidence-maturity levels when it comes to the three major cloud environments (SaaS, PaaS, IaaS or DaaS). When it comes to Cloud strategy, financial organizations have strong adoption reasons.
- Improved Data Security – Cloud providers meeting certification standards, degrees of migration support, reliability, and performance of the Cloud technology
- Reduced Infrastructure Costs – Compared to on-premises systems and their complex adaptability to organizational changes, Cloud systems work quicker for all changes to IT infrastructure.
- Efficiency gains – Be it for reasons of disaster recovery, quality control, loss prevention, flexibility and sustainability, Cloud infrastructures responds quicker, and helps with the bottom line.
In simple terms, Cloud migration represents “Accelerate to your next”! And, for Banks cost savings, business continuity, agility and focus, and green consciousness are important considerations especially after the pandemic.
When it comes to the various options (Private, Public, or Hybrid; Cloud Native or Digital First strategy) or models (Service, Deployment and Operating), Cloud Optimization Strategy is a key element for accelerating growth and managing costs.
Before we pick out the Banking industry’s top practices, it is worthwhile to understand the major (and costly) complexities that banks face:
- Lack of visibility leading to various applications, and network performance issues
- Challenging to keep track of cost wastage due to over-configuration, non-usage of idle assets
- Improper provisioning and poor resource management
- Imperfect architecture design and the related value loss
- Misaligned departmental approach
Most of the mentioned challenges can be remedied when a robust cloud optimization strategy focusses on right-sized, efficient, and an elastic cloud solution.
Elements of a cloud optimization strategy revolve closely around workload modelling, Cloud cost visibility and workload automation. Broken down below are the primary optimization actions:
- Hunt idle or unattached resources (resources purchased and forgotten, or lying unused)
- Leveraging heatmaps (work out specific peaks and valleys in computing demand) • Right size continuously (analysing computing services and optimizing them to achieve peak performances)
- Use Autoscaling to reduce costs during off-hours (Design workloads for scalability) • Minimize data transfer costs (by placing object storage and compute services inside the same region)
- Using serverless computing (saves time and reduces operating expenses)
Accelerating your next!
Some banks are exploring specific cloud solutions while others are considering a cloud-based transformation to a truly digital organization. Key to this assessment would include a review of the company’s current IT structure, its internal staff, and its technology operating model. Banks focused on becoming digital players— putting technology at the core of their businesses—can reap significant benefits, but achieving this goal depends upon a coherent cloud strategy which includes using cloud as a business asset
Views expressed in this article are the personal opinion of Srivatsa Subbanna, Vice President, DataTech, Maveric Systems.