Pressure is mounting on the banking and financial services (BFS) industry to move quickly toward a cloud-first strategy in order to maintain competitiveness. And as BFS institutions try to keep up with the ever-changing demands of their customers in the face of emerging technologies and alternative business models, they are formulating novel strategies.
Game-changing technologies, such as Cloud, have emerged as a means by which the most successful banks can significantly enhance their customer offerings. While a 90% increase in cloud-based tool adoption in the financial sector has been seen over the past few years, some institutions are hesitant to make a move.
Despite the hesitation displayed by some players, the use of the hybrid cloud in banking has exploded in popularity and has been implemented in a number of operations. Here, we dive into the significance of hybrid cloud for banking and financial sector and discuss ways in which the stakeholders can adopt and utilize it.
What exactly is Hybrid Cloud Model?
A hybrid cloud is a combination of applications operating concurrently in distinct environments. With this approach to cloud computing, businesses can deploy workloads to either a private or public cloud, and then migrate them back and forth as their needs and budgets dictate.
Let’s go into more detail about the advantages of hybrid cloud for banking and financial industry.
Advantages of Hybrid Cloud Computing for the Banking Sector
Private and public clouds, when used independently, may not sufficiently address the specific requirements of financial institutions. However, tapping the concoction of the aforementioned cloud computing models — hybrid cloud for banking and financial institutions can help the stakeholders reap more rewards.
Aiding in adaptability to changes in the market
As the banking industry continues to evolve at a rapid clip, hybrid clouds have emerged as the industry standard for keeping up with market demands. This hybrid cloud environment paves the way for financial institutions to introduce new products and services without having to invest in pricey IT infrastructure replacements. As a result, new capabilities can be developed and implemented rapidly, removing further obstacles to the execution of business strategies.
Cost-controllability with a degree of flexibility
Financial institutions can significantly reduce their spending on IT services with a hybrid cloud architecture, without having to compromise on performance. Getting a product to market more quickly means reducing the number of iterations required for each step of the process (development, testing, and rollout). In this way, financial institutions are able to cut costs, especially when employing a time and materials approach.
As an added bonus, the majority of cloud service providers operate on a pay-as-you-go basis, allowing you to avoid incurring significant upfront costs for services you might never use by only paying for the resources you actually use.
Putting security at the forefront
The capabilities of hybrid cloud computing aid in preventing or mitigating the severity of a data breach in a digital banking infrastructure. Financial institutions can lessen the likelihood of a data breach by using a hybrid cloud architecture that separates sensitive data for storage in a private cloud from other records stored in the public cloud.
The authority over data
One of the primary benefits of hybrid cloud computing for financial institutions is that data can be stored in a single environment rather than spread out across multiple data centers. Also, the hybrid cloud can help financial institutions meet specific requirements set forth by regulators.
Prioritizing customer experience
Hybrid clouds make it possible for more adaptable, mobile, and user-centric applications and services. Several examples have emerged from the banking sector; for example, a major European bank has used hybrid cloud services to create a mobile app that consolidates a number of services into a single platform and permits customers to pay with their bank accounts.
The Know-Hows of a Hybrid Cloud Implementation for Banks
It’s important to adhere to certain standards when implementing a hybrid cloud strategy, as these are tailored to the needs of the banking sector.
As the move toward digitization gains momentum, financial institutions will need to migrate their operations from dated, costly on-premises systems to flexible, low-cost cloud solutions. In this case, the hybrid cloud can supply the adaptability and scalability that financial institutions require to meet the ever-shifting needs of their customers. Furthermore, it can assist them in meeting certain regulatory needs while allowing them to keep complete command of all data and applications.
Powered by our extensive experience serving clients in the banking industry across all segments, from retail to wholesale to investment banking, we offer cloud transformation solutions to simplify and reduce the cost of migrating to the cloud ecosystem.