In part one of this three-part blog series, we outlined the challenges faced by modern banking and financial institutions as they adapt to, and adopt, the cloud. You can read more about that here. Today, we’ll discuss the considerations and implications of balancing cloud implementation costs with innovation.
The Promises and Challenges of the Cloud
Banks and financial institutions (FIs) are looking at cloud transformation initiatives for scalability, innovation, faster time to market and cost factors. Cost considerations are critical for enterprises managing IT budgets with finite resources. Financial service providers aiming to establish resilient and cost-effective IT are being increasingly defined by the ability of their partners to demonstrate agility, resiliency, cost-efficient cloud usage, innovation and a personalized approach.
However, the transition to and operation of cloud-based infrastructure is not without its hurdles. FIs often encounter complex pricing structures from myriad cloud technology options that can be difficult to navigate or control, leading to unexpected costs. The cloud commit-to-consumption gap is unaddressed. The variability of cloud expenses, which can fluctuate based on demand, criticality and resilient service needs, and data transfer and storage needs, can be a budgeting and forecasting challenge. There is also the issue of ensuring compliance with industry regulations and standards, which can impose additional layers of complexity and cost.
Additionally, the very nature of the cloud – with its distributed architecture – can introduce latency concerns, particularly for time-sensitive financial transactions. Keeping data secure is another significant concern, given the sensitive nature of financial data and stringent regulatory environment within which financial services operate.
Success Through Optimization
For these organizations, success is not just about adopting cloud technology; it’s about optimizing the environment to achieve agility and cost efficiency. Banks and FIs must focus on committing to consumption bridge and avoid over-provisioning. Service providers must personalize their approach to cater to individual client needs, which can involve custom-built cloud solutions and a deep understanding of client-specific operational contexts.
The challenges for banks and financial institutions in using cloud technology are multifaceted, involving not only the cost but also the complexity of operations, compliance, security and the need for a strategic approach to cloud resource management.
Coming in part 3 of this series, we will outline how we’ve helped a large number (and growing) of customers around the world navigate their journeys to the cloud efficiently and seamlessly. Trust me, you don’t want to miss it. And, in the meantime, you can read up on all our services for the banking and financial services industries here.
Abhishek Bajpayee, Sales Enablement Leader, Technical Sales Organization
Vineeta Kumar, Global Head of Banking, Financial Services and Insurance