Despite the growth of the cloud over the past few years, there remains some confusion around the concept, particularly in the financial services sector, where the mantra tends to be one that suggests regulations prevent them from making use of this service.
Ron Raffensperger, CTO for enterprise data centre solutions at Huawei, says that he is often told by banks that the regulator will not allow them to place critical data in the cloud. However, he points out that this is a statement that is only true about the public cloud.
"There still seems to be a misconception around the various types of cloud that can be used - a private cloud will offer many of the same benefits as a public one, but in a much more secure environment. In addition, a hybrid cloud model enables an organisation to obtain the best of both, by hosting critical data in a private cloud, but at the same utilising the extensive resources found in public clouds like Amazon Web Services or Azure," he says.
"Despite these misconceptions, things are beginning to change as more financial services organisations realise the benefits that can be obtained from running at least certain operations in a private cloud. These include increased flexibility and a much more rapid speed of implementation for new capabilities."
At the same time, continues Raffensperger, leading banks are also starting to recognise that the public cloud can offer certain benefits. The Amazon and Microsoft clouds, for example, offer advanced artificial intelligence and analytics, as well as the kind of massive scale required for the analysis of big data. So banks are eager to be able to gain access to the kind of scale public cloud provides, without the significant investment that would otherwise be required.
"In addition, there are certain capabilities that are necessary for a bank's operation, but are not critical services - such as e-mail, for example - that would in the past have been hosted in the organisation's data centre. However, in the modern world, the realisation is dawning that it could be simpler and faster to rent a service like this from a public cloud provider. The growing understanding of how both private and public clouds can benefit banks again hints at the likelihood of them adopting a hybrid model."
"While concerns about security and regulatory matters is one of the key issues holding financial services back from fully embracing the cloud, it is crucial that banks become better educated around the cloud, as it is a vital foundation for digitally transforming the business."
Enterprises across vertical markets are digitally transforming and through this, gaining a host of new advantages over the competition. This is why banks should be approaching the subject of the cloud with greater urgency, says Raffensperger. One only has to look at the rise of digital currencies and non-traditional financial institutions to realise that there are new competitors arising all the time, and most of these players are born in the cloud. This means that they have access to all the benefits of the cloud - like speed, flexibility and scalability - from the get-go.
"These new rivals are the greatest threats to the traditional financial services companies, and yet banks will not be able to compete successfully with them if they are not in the cloud themselves, because they will simply be too slow in bringing new products and services to market."
"We are in a time of huge disruption, especially for this sector, as we see financial transactions shifting away from cash and card-based operations to ones performed via smartphone, requiring no special technologies or applications at all. This has lowered the barrier of entry for new competitors, and the established players will only be able to maintain their dominance if they too can offer these new services to customers - and this can only be achieved at the speed required if these banks are fully immersed in the cloud," he concludes.
Share