Some of the biggest challenges CIOs in financial organisations are facing are the reduction in budgets and the need to be more efficient with their resources. An organisation needs to meet peaks in demand like monthly payroll runs, batch processing, or use of customer facing applications. Ideally, it needs to cost nothing when it’s not in use.
Specialised, single purpose hardware is expensive. Plus, it’s a finite resource. The private cloud is not free from these constraints either – no matter what anyone tells you, as with any hardware-based solution, it’s also a finite resource.
Financial organisations can’t expect a private cloud to tackle the most demanding workloads perfectly every time; there are going to be jobs that are simply too large or complex to tackle. However, to meet those peak demands every time you would need to have whole data centres full of kit potentially doing little to nothing at times of low demand. That’s a huge cost burden.
Financial institutions need to make the best use of their IT spending power so having a cloud infrastructure that’s versatile enough to meet the demands of the business without breaking the bank, so to speak, is really important.
This is where the Public Cloud comes in.
The key benefit for financial services firms looking to take full advantage of public cloud is there is a huge Return on Investment (ROI); there’s the increased efficiency, increased agility, and faster time to results too.
There are, of course, the security and compliance concerns of public cloud. But, how can CIOs help their firms save money while enhancing operational risk management and cybersecurity capabilities?
In my view, any worry about security and compliance doesn’t rule out public cloud. Pinpoint where you must comply with regulations and where keeping data secure is paramount and then build a hybrid cloud infrastructure that’s intelligent enough to know where the work is placed – bursting out only for those high demand workloads that can leave the network perimeter and hit public cloud.
Plus, there’s also the added benefit that OpenStack, the most well-known free and open-source software platform for cloud computing, has been shown to have zero security flaws or vulnerabilities.
There is an active security group for OpenStack that looks for security weaknesses and tests key components that, arguably, makes it more secure than financial organisations’ own legacy infrastructure and perfect for their private cloud.
The sheer size of some financial institutions’ infrastructure means that moving to public cloud and adopting a hybrid cloud approach will take years. Some firms have already started moving some of their newer services and consumer-facing applications to the cloud and, in my view, this is the right way to approach the switch. It’s about developing more cloud native pieces of work, enabling CIOs and their teams to understand the real value of public cloud by learning lessons from moving non-business critical services. So then moving from traditional workflows to a cloud native way of working is not nearly as scary or challenging.
Only the very largest financial institutions tend to have the resources internally to begin rolling out and testing public cloud and incorporating it into their processes. The challenger banks already have taken full advantage, yet we have the tier two financial institutions that are ready, willing and interested in containerisation (virtualising the Operating System in which any application can be stored, transported and run – an efficient method for deploying applications) and public cloud, but don’t have the resources to do proof of concepts.
In reality, these tier two banks need cloud engineers and architects, but once again that’s a significant cost, particularly when testing out public cloud services. So the solution has to be working with industry experts. It’s why I suggest that those organisations, whether financial services or other, work with the likes of RedHat. You will get the enterprise level support and can adopt the best of breed OpenStack solutions that they add support to.
There are also the cloud implementation specialists – they’re the ones who know how to build your infrastructure. Look for those that have experience in building cloud infrastructures with data that must be held in a secure manner and meet compliance and governance regulations.
The technological advances we’ve seen in public cloud infrastructures as well as the developments in OpenStack really means that moving to a hybrid cloud model is now a viable option for financial institutions.
There will always be a place and a need for private cloud to host and retain the critically important data, but it’s a costly resource compared with public cloud, so it surely makes a lot of sense to take advantage of open source cloud technology to help discover the cost and efficiency savings that so many CIOs are now being asked to find.
If you would like to leave me a comment on this topic or wish to discuss with me in more detail, please get in touch.