Forecasting is a hybrid cloud mix for banks

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Banks are moving to the cloud as part of their digitization efforts, more purposefully and faster than ever. They are finally transforming from long-standing monolithic systems and shedding their apprehensions about regulatory compliance, security and skills availability, and welcoming transformation and the benefits brought by the cloud.

In doing so, banks can use the latest cloud-native technologies, in conjunction with the domain skills they have developed over many years, to advance in solving the difficult challenges posed by fintech companies of the new era born in the cloud. They will have access to a flexible and scalable IT infrastructure based on agile principles that will allow them to meet the changing needs of banking operations and modern customers by quickly delivering innovative and personalized offers.

Worries of being overloaded during peak seasons will be a thing of the past, as the cloud's dynamic elastic scalability and rapid capacity provisioning helps banks weather peak transaction loads, without affecting quality or fluidity of customer experience. At the same time, the operational costs of the infrastructure are set to come down with management and maintenance.

Having decided to go cloud, the next question facing banks is: which deployment model to choose? What works best: single cloud or stratagem cloud; public or private?

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In a recent cloud adoption study, we found that 41% of banks used a private cloud, while 28% used a public cloud. Both models have their share of advantages and limitations. The public cloud model excels in situations where scalability, flexibility, on-demand computing, and elastic scalability are paramount. Latency, governance, data residency, and other areas of compliance can be issues here.

On the other hand, the private cloud model is the best option when security, control, compliance, and personalization take precedence over other requirements. However, they may have compatibility issues with some legacy applications and capability extensions.

This is one of the reasons why banks are now more willing to combine the two models. Even large and medium-sized financial institutions that previously only chose the private cloud are now open to using the public cloud to host their small, non-essential applications. In the previously mentioned study, 31% of respondents used a hybrid approach: a winning combination of on-premises, private, and public cloud models that promise scalability, efficiency, and technology capabilities that stand the test of time.

Here, banks can choose to keep legacy systems, which are not cloud-ready, on their premises. At the same time, their technology decision makers can craft the ideal mix of applications that can be distributed across private and public clouds based on the use cases most relevant to their needs.

While making these decisions, it's also important to weigh the additional benefits of a multicloud arrangement. Banking institutions can mitigate the risk of vendor lock-in and switch between cloud service providers to seamlessly meet business and market demands. They can sele...