In my discussions with financial services clients on data center and cloud transformation, I find a state of play that parallels that of the broader market – many community banks and credit unions have fully embraced a Software-as-a-Service (SaaS) model, operating their core banking systems on shared multi-tenant platforms. Then there are several large multinational banks that have already setup their own extensive private cloud infrastructure, and mid-sized banks are highly virtualized and looking at how to build a cloud enablement strategy while meeting compliance and cost mandates.
Clearly, the financial services industry is embracing the cloud. Gartner’s recent report on industry trends, Gartner Identifies Top Vertical Industry Predictions for IT Organizations for 2014, states that, by 2016 more than 60 percent of banks worldwide will process the majority of their transactions in the cloud. However, financial services CIOs are increasingly worried about the seamless transition to a cloud enabled environment without compromising security and compliance.
With new regulatory mandates such as BASEL III, SOX and Dodd-Frank Today, financial services organizations today are facing increased compliance costs and reduced fee income. Jamie Dimon, chief executive of JPMorgan Chase, expects to spend US$2 billion in annual compliance costs starting in 2014. In addition, multiple mergers and acquisitions in the financial sector are driving the need to integrate old infrastructure with new. With such challenges in mind, moving toward a fully realized cloud strategy can help financial services organization to:
On the Road to Cloud
Regardless of where you are on your cloud journey, the next step forward can be daunting, and working with an experienced cloud partner like Unisys can provide the insight and expertise to pave the road ahead. To get started, I typically recommend looking at applications that are within the scope of your project – after all this is the foundation of your core business logic and differentiation. A rigorous and rapid assessment of your apps using Unisys Intelligent Application Alignment (IAA) services can determine an application’s suitability not just for the cloud, but its best fit overall which may be on dedicated hardware, a virtualized pool of resources, a public or private cloud, or perhaps a dedicated partition of the Unisys Forward! platform. This process will also help identify if workloads are properly placed within a multi-tiered datacenter environment. Many financial services organizations have world class tier 4 data-centers, but may not have a rigorous process that limit the workloads placed within them to only those requiring tier 4 attributes. Just as transitioning dedicated hardware to a private cloud can result in substantial cost savings, moving suitable workloads from tier 4 to tier 2 will reduce cost and still help you meet your SLAs and compliance mandates. The IAA assessment helps you discover applications that need to be moved and provides a set of blueprint recommendations for your targeted applications. You can then begin the process of transformation, with a structured methodology and experts to execute the application migration.
With so much to cover on this topic, I will provide more insights into building a private cloud that is fully integrated into your operational, management and financial processes, and an approach to bridging your private and public cloud workloads in my future blog posts. Watch this space for more updates.