Apr 22 2022

What’s Next for Banks in the Cloud?

Banks are embracing the cloud slowly. Here are three steps they can take to safely advance their public cloud objectives.

Banks are making the move to the cloud — with conditions. While cloud use has increased significantly from the 18 percent of financial services firms reporting “broad adoption” in 2019, the shift has been primarily into private, not public, clouds. In fact, recent survey data shows that while many banks have developed and deployed mature private clouds, public cloud platforms such as Microsoft Azure, Amazon Web Services and Google Cloud Platform account for just 15 percent of total workloads.

This creates a challenge. While private clouds are ideal for highly sensitive data and secure transactions, they can lack the sheer resource capacity and scalability of their public cloud counterparts. As a result, many companies now opt for multicloud strategies that use specific clouds for specific functions rather than attempting to generalize across a single platform.

In practice, this offers the best of both worlds: TechTarget calls multicloud “the future of IT transformation.” For banks, this speaks to the need for an evolving approach that includes both public and private platforms to make the most of multicloud frameworks.

But where do they start?

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Three Ways for Banks to Succeed in the Cloud

While the public cloud offers significant benefits for banks, it’s not an all-or-nothing proposition. Instead, financial firms can take targeted approaches to cloud adoption that pinpoint potential value in key areas and deploy services to match.

Common approaches include:

  1. Investing in AI-driven solutions to improve personalization. Artificial intelligence tools make it possible for banks to improve customer personalization efforts — now a requirement to ensure clients feel heard and valued by their chosen financial institutions. Using AI tools paired with a public cloud environment provides easy access to these types of insights.

    For example, while it makes sense to keep applications that handle high-value, highly confidential data close to home, it may be possible to offload tasks such as data collection or correlation to public cloud services that incorporate robust automation to reduce errors and deliver results quickly. By keeping critical processes in-house but farming out first-stage operations to the public cloud, banks can find a balance between performance and protection.

  2. Pinpointing applications that thrive in the public cloud. Not every application belongs in the public cloud. But keeping every app locked behind private cloud walls creates an environment that comes with a natural cap on scale: Banks can only afford to build in so much extra capacity before budget and staff resources run out. As a result, banks are well-served by taking the time to assess current applications or processes to identify likely candidates for a shift to the cloud.
  3. Leveraging experienced cloud service providers. Given the variety of public cloud services available even across the “big three” of Google, Microsoft and AWS, banks can benefit from the assistance of an experienced cloud service provider that can point them in the right direction and help build a multicloud framework that meets current needs and leaves room for ongoing improvement as new priorities emerge and new applications are required. In addition, managed services can provide peace of mind for banks around the reliability and stability of public cloud connections. Not only does this reduce the risk of unexpected downtime or data loss but it also frees up time for financial IT teams to tackle innovative efforts that could help banks outpace their competition.

READ MORE: Learn how a multicloud can benefit financial institutions. 

Banks can’t afford to ignore the benefits of public-private cloud combinations. In practice, however, making the shift from private operations to multicloud frameworks requires a targeted approach.

This article is part of BizTech's EquITy blog series. Please join the discussion on Twitter by using the #FinanceTech hashtag.


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