Banks are catching on to the benefits of the cloud. A full 55% of banks in North America cite migrating workloads to public cloud infrastructure as a technology priority for 2022.
Migrating to the cloud can lead to increased speed and flexibility for financial services organizations. And as their use of the cloud increases, so too do the advantages.
“As banks move up the sophistication chain in terms of cloud adoption, being able to use on-demand services for data analytics and data processing is hugely beneficial,” says Matthew Coombe, Leading Principal - Solutions Enablement of Sourced Group, an Amdocs company.
Moving up that sophistication chain, however, requires the right strategy. When pursuing a move to the cloud, financial services organizations need to take a long-term approach.
“Having clarity in terms of what they’re trying to achieve is enormously beneficial,” explains Matthew. “If organizations are pursuing cloud because it’s contemporary, popular and buzzy at the moment, but there’s not a clear line of sight around what they’re looking to achieve at year one, year two, year three, year five, then there’s a risk of regression because they’ll be figuring out a lot more things on the fly.”
Having a clear line of sight requires developing a phased, thoughtful strategy for an organization’s cloud migration. Unfortunately, many organizations start with a less effective way — by moving a handful of workloads to the cloud and expecting them to open the floodgates to further cloud adoption.
While you do need lighthouse examples to help build critical mass when getting started, “if there’s not a broader view on how you’re going to achieve safe, successful adoption for hundreds of workloads, then you’re actually going to struggle from a tooling perspective,” notes Coombe. “Your tools, guardrails, and controls won’t scale.”
Avoiding compliance challenges
So-called “control sprawl” is a risk when organizations take a workload-by-workload approach to migration to cloud. Control sprawl occurs when organizations implement duplicative and overlapping controls as they move workflows to the cloud; it can lead to difficulty testing for compliance with the fast-changing regulations financial services organizations face.
“Ultimately, the board is accountable to regulators such as FINRA in the U.S. or APRA in Australia. They’re accountable to testing for the regulator that data is safe, and applications are compliant” states Coombe, who has deep experience in the regulatory frameworks applicable to financial services organizations as they move to the cloud. “That’s very difficult to test if you have that sprawl, because if you have hundreds of different apps interpreting compliance obligations and constructing controls based on their own opinions alone, it can be very difficult for large, complex FSI's to get a full, accurate view of the compliance posture across their estate.”
“A stronger approach is that, while you start on those initial lighthouse projects to create critical mass, you also think three years ahead to ask, ‘How much workload will we have? How can we test across different business units to different workloads? How do we remain compliant with our objectives?’” adds Coombe.
Building momentum and learning
Thinking three years (or more) ahead also helps organizations avoid other risks. Moving too fast at the beginning — such as implementing multi-cloud models before they’ve even achieved scale with a single cloud service provider — can get expensive, for example. Not only is cloud talent costly, but managing multiple implementations can grow complex quickly.
“Having a multi-cloud strategy isn’t necessarily bad, but trying to do foundational work with multiple cloud providers at the same time is enormously complex,” says Coombe. “They may be working with Amazon, and they want to go build a Google platform and build a consumption model for Google as well, but they should wait until they’ve actually got momentum and learnings with Amazon that they can apply into that secondary cloud service provider.”
In fact, working piece-by-piece with individual cloud providers can have the downside of achieving short term wins whilst creating less focus on the long term hyperscale use cases. Collaborating with the right professional services partner can help financial services organizations strategize for long-term success and take a phased, thoughtful approach to cloud adoption.
Trusted cloud-adoption partnership
Partners like Amdocs have deep experience working with banks and the financial services industry and can provide an unbiased perspective on how organizations can achieve their objectives.
Ultimately, “there’s no compression algorithm for experience,” concludes Coombe. “Having well defined strategic business goals and technology roadmaps for broad adoption will drive the tactical activities required to realize these goals, and having experienced partners are the simple, foundational things that organizations can do to pursue success.”