Cloud Computing – Powering The Future Of The Financial Services

As Financial Services organizations migrate their infrastructure to the cloud, there are three key tenets to be followed:

Managed Cloud Service Providers

As the number of online financial transactions surge in the wake of the covid-19 outbreak, financial institutions are becoming aware of the need to spearhead key digital transformation initiatives for ensuring that issues like technical glitches, power outages in data centers and mobile application crashes do not occur regularly and are resolved in real-time if they do occur. 

With a view to providing their customers with a seamless and simplified transactional experience, banks and other financial services will need to invest in new-age technologies like advanced cloud computing solutions. As data is backed up by multiple services and in some cases across wide geographical regions, there is no single point of failure and the risk of data crash or breach is mitigated considerably. By migrating to a cloud computing framework, financial services companies can reduce the need to purchase multiple onsite servers for data storage and lower maintenance costs considerably on a day-to-day basis. It is time that banks and other financial institutions invested in building a robust hybrid and on-premise cloud computing model. 

As Financial Services organizations migrate their infrastructure to the cloud, there are three key tenets to be followed:

  1. Security and Compliance

As financial services institutions and regulatory bodies get comfortable with security over the cloud, there are still several organizations that are “Clouded” by Cloud Security. This despite the fact that the cloud has become more and more secure with the cloud providers making their infrastructure very secure supported by an abundance of bolt on services/tools in the marketplace.

To cover the security and compliance aspect of Cloud, Financial Services organizations should focus on three aspects:

  • Regulatory Compliance – As banks design their cloud architecture, meeting the requirements of regulatory bodies is of paramount importance, ensuring security and compliance right from architecting the solution through implementation and ongoing compliance. Some cloud providers have offers that help ensure compliance to specific regulatory standards that automatically monitors the financial institutions’ cloud infrastructure and reports compliance risks/breaches. 
  • Secure Cloud Architecture – Ensuring that the architecture that has been designed is secure and enterprise-grade. 
  • Strong IAM Policies – Use tools and services to provide a strong IAM layer on top of the enterprise apps that are on the cloud while providing seamless access via robust access control policies to a host of applications that a typical financial services institution uses.           
  1. New Ways of Thinking & Working
  2. Cloud Workforce – As we migrate to the cloud, there must be a shift in the thinking. There will be no more infrastructure resources and the workforce will all be developers.  
  • Cloud Apps – For new development, develop over the cloud. For on-prem, look for alternate solutions on the cloud. For some legacy systems where there is not much of an option, look at building an API service layer on top of the legacy apps which can then be consumed by the cloud apps. 
  • Agility in thought and Action – Being on the cloud will help financial institutions if DevOps can be fast tracked through agile thinking and being agile. Starting Agile development methodologies, more frequent releases, embracing the “Fail Fast-Fail Safe” approach, making incremental and quick changes are some helpful strategies. Agility should not be restricted to being a technology function but should be implemented across the organization. HR and operations are great places to implement Agile approach to running and supporting the business. The onus must be on encouraging quick decision making and discouraging re-litigation of decisions. 
  • Strong Partnerships
  • Cloud provider – Selecting the right cloud provider is of paramount importance to the cloud strategy. Organizations usually tend to go with a multi-cloud strategy driven by several parameters such as its IT strategy, partner landscape, legacy applications and vendor enterprise software solutions. 
  • "Born in the Cloud" companies as partners – In order to get the best value of services from cloud partners, preferably choose “Born in the cloud” companies who have a skilled workforce and a wealth  of experience helping customers migrate to the cloud. They also tend to have the tools and services that can get you on the cloud in a fast, economical, and efficient manner.
  • Cloud Enabled and Cloud Agnostic Enterprise software Providers – When choosing 3rd party enterprise software solutions, insist on a cloud solution. If the partner doesn’t have a cloud solution, insist on a roadmap to get there.  For existing enterprise software vendors, discuss their cloud strategy and incorporate it in your roadmap.

While these tenets are important for any financial services organizations going through a cloud transformation, the journey must begin with a sound business case for migrating workloads to the cloud. Organizations migrating to the cloud are no longer only doing it from a financial perspective (cost savings, Capex to Opex, pay for usage) but to add business value and agility. 

As part of the business case for the cloud, organizations will have to make several strategic decisions such as:

  • Redefining the IT strategy – What will your IT organization look like in few years from now. What kind of workforce do you need? What kind of skills you want to develop in-house vs outsource?
  • Defining a cloud strategy – Hybrid or Cloud only, Public vs Private Cloud, Multi Cloud
  • Strategy for legacy apps – use APIs to abstract the legacy layer and extract the business layer out as much as possible. The strategy could be different for each legacy app.
  • Migrating to cloud version of third-party enterprise apps – most enterprise apps have migrated to the cloud. In the case where they are not cloud-based, ask for a cloud deployment roadmap and an implementation plan from these vendors.  
  • Upskilling the workforce.
  • Buy vs Build Decisions - explore solutions from fintechs and 3rd  party tools rather than building in-house apps for some niche business requirements.


Cloud transformation is one of the three pillars of digital transformation. Implementing a solid cloud transformation program enables banks and financial services organizations to embrace digital, adding value to both its customers and its shareholders while complying with the regulatory framework in the market it operates. 

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