Suddenly it works: The financial sector is pushing into the cloud. Are the years of concerns suddenly a thing of the past? And what about the autonomy of financial institutions? Answers to the most critical questions on the way to the data cloud.
The financial sector’s digital transformation has fundamentally changed many established technologies and service models in recent years. The institutes held back for years only when it came to cloud computing. But now, the conservative and highly regulated financial sector is also pushing massively into the data cloud.
Multiple Concerns About The Cloud
Even if there are still concerns about data protection, IT security, and regulatory risks, new business models and the associated earnings prospects are attractive at low-interest rates. Financial companies are transforming into data-centric companies. Analytics and artificial intelligence (AI) require massive data and performance.
The migration of services to the Cloud is one of the dominant technology trends in the financial sector. And not only there: Cloud projects are currently trendy throughout the economy. In the meantime, the issue of safety has become more of a driver than a stumbling block. Almost a third of those surveyed expect greater IT security from going to the Cloud. Concerns seem off the table.
Basic Architectural Models
But what exactly is that, the Cloud? The terminology on this topic is diverse, overlapping, and confusing. To counter this, it is helpful to differentiate between the various Cloud architectures and, above all, not to mix them up with the accompanying service models. There are two different types: Cloud-agnostic and Cloud-native. A native architecture is implemented from the ground up using the Cloud provider’s resources, such as AWS Lambda, MS Azure Functions, or Google Cloud Functions. This results in advantages such as higher efficiency and shorter development times. The time-to-market is significantly reduced, and if a company is willing to bear the associated training needs of the employees,
On the other hand, a cloud-agnostic architecture is preferable if the user wants to remain independent of the cloud provider. The applications and work steps are implemented so that they can run in any cloud. You are free to choose the provider, from the private cloud in your own data center to local companies to the big top dogs from overseas; all options are open.
The Service Model Is Also A Question Of Autonomy
Based on these basic architecture models, various service models are used. They differ, to use a term from the industry, in the vertical integration, i.e., which aspects a company would like to operate itself.
With infrastructure as a service, only the hardware comes from the cloud provider. The application itself, the data, middleware, and the operating system remain in your own hands. Platform as a Service goes one step further: in this case, the service provider takes care of everything except the application and the data. Finally, the company does not even provide the application with software as a service.
Heavily Regulated Market
Although many regulations regarding data protection and IT and cyber security restrict the financial sector, it has become clear that these are not an obstacle to cloud solutions. The additional restrictions that arise can be effectively resolved. But the frequently expressed wish “Company XY is now going into the cloud” is only an unspecified wish and not a strategy.
Avoid Basic Mistakes
Starting with these questions and going ahead with the often lengthy analysis may sound like a brake on euphoria or misgivings. The simple truth is that many cloud projects fail because the inherent project risks are underestimated. These include, among other things:
- Lack of planning: It is a misconception that you can switch to the cloud at the push of a button. Nobody should do without a functional specification or a proof of concept.
- Neglected dependencies: Databases and other auxiliary systems can be connected, but does this also apply to every legacy system involved in the process in question? This is where the legacy trap lurks.
- Delegated responsibility: Security, availability, and data protection do not always correspond to the promises made by the provider. Problems don’t stick with him, but with his own company.
- Do it all yourself: Accessing cloud resources may be easy, but cloud migration is very different from a typical IT infrastructure project. Most system engineers reach their limits here. The involvement of business and solution architects with experience in cloud projects is urgently required.
Some cloud projects fail beforehand, but unfortunately, this often only becomes apparent during implementation. Two aspects play an essential role here: the lack of integration with the business strategy and, as a result, the lack of support from management.
Also Read: Cloud Computing -What It Provides?