By their nature, financial services institutions are invested in optimizing costs. And with the pressures the industry is likely to face in 2024 — high interest rates, regulatory concerns and the continued stress of inflation — financial leaders may be even more interested in budgets than usual.
But as any financial expert will tell you, effective cost management needs to be an ongoing effort. Optimizing spending across all arms of an organization — including investment in the cloud — can help financial institutions achieve their business goals and make them more resilient in the face of economic instability. And, for an industry that increasingly relies on hybrid and multicloud solutions, cost is particularly important: 34 percent of IT leaders say that they use a multicloud approach in part to reduce costs, according to a Cisco survey.
Here are three ways financial institutions can improve their management of cloud costs.
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Manage Cloud Costs Simply with FinOps
Cloud financial management, also known as FinOps, is the strategy and practice behind how organizations manage their cloud costs. It’s best if FinOps is part of an overarching cloud strategy developed at the project’s start, because a haphazard move to the cloud can result in a lower ROI. However, institutions that have already migrated to the cloud without this kind of rigorous strategy can still deploy FinOps, which helps them sink more costs into their cloud plan.
For an organization’s FinOps approach to succeed, visibility and clarity are critical — not only because of organizational best practices for transparency, but also so that any abnormalities can be spotted and addressed as soon as possible.
FinOps tools such as Inscape Cloud Management can provide that clarity, giving organizations a clear look at their cloud spending across multiple cloud vendors. Spend is presented in one downloadable invoice, supporting businesses in their transparency and reporting efforts. This is particularly important for financial institutions, which have particular reasons to turn to multicloud solutions.
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Save Big Up Front with Reserved Instance Lifecycle Management
Reserved instance lifecycle management is sort of a sophisticated version of the prepaid calling cards of yore. Organizations reserve cloud capacity up front, which lets providers give them that capacity at a lower rate. From there, those reserved instances are used for specific resources designated within the RI agreement. Both Microsoft Azure and Amazon Web Services estimate that costs can be reduced by as much as 72 percent using an RI approach compared with on-demand pricing.
Committing to a specified level of use requires planning and monitoring, but it can help financial institutions keep costs in check. Over the long haul, RI practices can lead to significant cost savings that outweigh the upfront resource investment of usage estimation.
READ MORE: Learn why cloud management services make banking better.
Managed Services Do It For You — and Save Money Too
Cloud management services specialize in corralling orchestration, compliance, management and cost optimization. This support can help financial organizations understand their spending and how they can maximize their resources going forward.
Working with a managed service such as IBM Cloud for Financial Services and NetApp frees in-house IT personnel to focus on mission-critical tasks rather than devoting resources to cloud management. It also helps financial institutions that have to hire and train additional talent to manage their operations.
Financial institutions have reason to move toward the cloud. This triad of cost-saving measures — FinOps, reserved instances and managed services — can help them do this without sacrificing the innovation they’re after. Coupled with a culture of cost optimization, these steps can help financial services stay competitive and agile in an evolving industry.
UP NEXT: What do banks need to enter the cloud with confidence?
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