- Unlocking Cloud...
Unlocking Cloud’s Potential in Financial Services
By: William Fenick
Headlines detailing financial firms’ trends toward cloud – including Santander’s recent announcement that will be the first global bank to offer cloud-based storage to its corporate clients – indicate the benefits cloud computing will provide financial firms. It appears that the financial world is waking up to the realisation that, if the Financial Industry Regulation Authority (FINRA,) one of the largest independent securities regulators in the U.S., can move its platform to AWS, so can other market participants.
Despite lagging behind other private sector industries in adopting cloud computing, financial firms are finally transitioning away from legacy IT to unlock cloud’s potential. According to Gartner, more than 60 percent of banks worldwide will process the majority of their transactions in the cloud by 2016. Driving this transformation is the understanding that cloud services will optimise their performance and that this will ultimately win back the confidence and business of their customers. As in other industries, cloud’s elasticity, agility, scalability and shift from CAPEX to OPEX are primary selling points for financial service firms.
Unique to finance and other highly-regulated industries is the fact that cloud can produce more compliant and secure IT systems. Increasingly, financial institutions are realising that legacy technology is no longer sufficient to meet the demands of today’s financial landscape that is characterised by new global regulations and reporting requirements. The U.S. Dodd-Frank Act, for instance, mandates increased transparency in the over-the-counter (OTC) derivatives market.
For financial institutions, this means tracking higher volumes of data, and recording every transaction in real-time. These requirements can create strain on in-house, legacy IT, which could lead to severe downtime and latency. Because firms suffer immense losses if they experience even milliseconds of delay, the risk of impacting availability caused by dated computing systems is not one that firms are willing to take.
However, despite a broad awakening around the disadvantages of legacy IT, security in the public cloud remains a significant cause of concern for financial firms. That is why a hybrid IT approach – one that combines legacy and cloud applications as well as in-house and outsourced IT – is emerging as the preferred model for the future. To streamline this hybrid IT reality, financial firms require strong connectivity between their on-premise data centres and the cloud.
This is something that Interxion offers the community of brokers, HFT firms, Exchanges and other financial leaders that reside in our Finance Hubs. Interxion’s innovative solution, Cloud Connect, provides access to multiple cloud providers simply and through a single, physical connections. This way, firms have the ability to leave sensitive data in-house and migrate other information to the public cloud; it’s a win-win situation, and one we believe will be the future of IT deployment for financial services firms.