Cloud

The Tech That Can Help Banks Build Multi-Cloud Strategies

For many financial organizations, multicloud is tough but tools such as containerization and cloud orchestration can pave the path.

Autumn Whitefield-Madrano

Autumn is an associate editorial director and a contributor to BizTech Magazine. She covers trends and tech in retail, energy & utilities, financial services and nonprofit sectors.

After years of foot-dragging, financial institutions are catching up with the business climate by turning to the cloud. Specifically, they’re using hybrid and multicloud solutions: A survey conducted by the Cloud Security Alliance shows that 57 percent of financial services organizations use a multicloud approach.

But this beneficial move still brings challenges. Read on to learn why a multicloud solution can be difficult for financial institutions to achieve — and why they should strive for it anyway.

What Are the Multicloud Hurdles for Financial Institutions?

In a word, complexity. While cloud solutions often offer elegant results, a multicloud solution brings in multiple cloud providers by definition. With every provider comes a new tool to be operated and a new layer of complexity in determining how it can play well with existing tools. That includes security concerns such as misconfigurations among providers; 37 percent of IT leaders say security is a challenge with a multicloud approach, according to Cisco.

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Other difficulties that financial institutions face with multicloud include a shortage of skilled workers, problems securing leadership and cultural buy-in, and a lack of visibility into the overall cloud infrastructure.

But it’s a finance-specific challenge that may loom above all others: risk. While cloud architectures can be highly secure, no tech approach is entirely without risk — a liability for a highly regulated sector that relies on risk management to stay afloat. As Red Hat notes in an article about cloud services for the financial industry, “Risk must be weighed more heavily than for many technologically similar industries without as much regulatory overhead.”

Why Overcoming Multicloud Anxiety Is Worth It for Financiers

The inherent risk of a multicloud approach also gently points to one of its strengths: diversification. Just as investors have diversified portfolios to spread out risk among sectors, a multicloud strategy spreads out risk among providers. As a Forrester report notes, “many financial services firms have embraced multicloud to avoid lock-in and are increasingly aware of their single-supplier risk.”

Using multiple providers also allows IT leaders to cherry-pick capabilities among vendors, extracting the best value from each provider to create a holistic suite of services.

Financiers will also appreciate the potential cost savings of a multicloud design. McKinsey found that Fortune 500 financial institutions could generate up to $80 billion in earnings before interest, taxes, depreciation and amortization in 2030 just through maximizing the potential of the cloud.

Then, of course, there are the benefits of the cloud as a whole: speedy access to critical banking information, enhanced customer experience, improved technological agility, ease of scalability and simplified use of advanced technologies such as artificial intelligence.

Four Tools That Can Make Multicloud Work for You

Simplifying and streamlining a multicloud approach can help financial institutions take advantage of the benefits of using various cloud providers. Here are four tools that can help the sector get there — all of which work together to create a secure, flexible environment.

Containerization solutions. This practice of bundling application code and settings in a “container” that can then move among providers is increasingly popular. That’s for good reason: It can result in supreme agility and scalability. Container management tools such as Kubernetes, which support other systems such as VMware’s Tanzu Kubernetes Grid Integrated Edition, IBM’s Red Hat OpenShift and Hewlett Packard Enterprise’s Ezmeral, make for portable, consistent, efficient deployment in multicloud environments.
Cloud management software. A comprehensive platform for managing various aspects of a cloud infrastructure, cloud management software such as Amazon Web Services’ AWS Management Console, Microsoft Azure’s portal, and Google’s Cloud Platform provides a unified interface that lets administrators oversee the components of the cloud environment.
Cloud orchestration tools. Complex, multitiered applications and services — such as those found in a multicloud design — call for cloud orchestration, which coordinates and manages automated tasks to achieve a specified goal.
IT services. Most IT services can support multicloud practices in some way, and cloud management services and software development have particular strengths. Cloud management services can encompass other tools, such as cloud orchestration, and allow users to oversee various aspects of how multiple cloud providers work together. Software development supports compatibility across cloud providers via custom applications, among other services.

UP NEXT: Build a cohesive hybrid IT strategy with these multicloud solutions.

The challenges of entering the cloud are a reason to consider progress, not halt it. As financial institutions overcome their cloud jitters, multicloud and hybrid solutions are positioned to offer the security, usability and convenience that banks are after.

Editor's note: This article was originally published on Jan. 9, 2024.

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