AWS for Financial Technology: Going to Market in Minutes

//AWS for Financial Technology: Going to Market in Minutes
Amazon Web Services AWS

Fintechs are increasingly finding Amazon Web Services (AWS) to be the perfect vehicle for setting up and going to market quickly and cheaply. AWS provides a fintech everything it needs—networking, multiple layers and segments, and automation capabilities for environment creation, code promotion and other processes—to move from development and testing to staging and production. With automation, this four-layer stack can be created in a matter of minutes with AWS. The fintech has to develop scripts for automation, but once that process is accomplished, AWS can automate the rest.

The start-up costs for companies that leverage AWS are exceptionally inexpensive. Fintechs don’t have to buy or maintain physical hardware, and they don’t need co-location space. It’s an easy entrance for a company to build an application—which expands the marketplace, fosters competition and thus provides more vendors for banks and other companies to choose from.

Moreover, AWS allows fintechs and other financial services providers to use only the resources they need to—when they need to. AWS can provide surge capacity when required that can then be throttled back down automatically. This capability saves significant overhead costs. And AWS operates in multiple regions, so you can build in redundancy, simply rolling over to another Amazon region in the event of an issue, because everything resides in the cloud. This auto-scaling feature is even more powerful when you add in the continuous integration features of Code Deploy, which installs your custom applications into the newly provisioned infrastructure.

Banks Getting into the Game

Banks are discovering the benefits of AWS, too. Most of their efforts are point-solution-based, although Capital One claims that it will move all of its systems and applications to AWS. For most financial institutions, though, the use of AWS will be evolutionary, with incremental movement of certain solutions one or a few at a time. Some existing providers of bank solutions are using AWS to store check images in the cloud, for example.

Legacy core systems will likely prove the most difficult to move to the cloud. Core providers may be skittish about having their product run through AWS and may not have fully tested for it. That’s one major reason why banks’ movement to AWS will happen incrementally.

AWS for Differentiation

AWS is constantly coming out with new services, many of which banks could use to stand out from the pack. For example, for alerts, AWS provides notification services with built-in SNS (simple notification service) messaging. The messaging capability is part of the notification service. Easier messaging would alleviate a big headache for financial institutions.

For security, AWS has Bastion-hosted servers that provide access to a production environment that companies can shut down when they don’t need it. (A Bastion host is a special-purpose computer on a network specifically designed and configured to withstand attacks.) This environment is more controlled than what banks typically have today.

Alleviating AWS Concerns

Banks may be worried about security and support for AWS. They have an infrastructure in place that is compliant with banking regulations; if they change to another system, they might have to go through the entire compliance process again. Employees might have to learn new skills. Many banks understand the value of AWS but are not sure how to get from point A to point B in moving there, and they may not know what the risks are or where those risks might arise. Understanding those risks will take time, so most banks will move to AWS in steps.

Xtensifi understands what’s involved and has helped companies move to AWS. For example, we helped Gro Solutions (, which provides a digital sales platform to drive omni-channel acquisition growth for financial institutions, to successfully deploy its platform on AWS in 2014.

Leveraging AWS—One Way or Another

Moving to AWS is not easy, but it’s not overly complicated, either. Banks can do it by leveraging internal expertise—if available—or an outside consultant. Once they do, they can take advantage of a myriad of services that can expedite speed to market, increase operational efficiency, and differentiate their brand from competitors. And even if they decide to stay where they are, they can choose from—and even acquire—the fintechs that use AWS to offer the innovative, digitized services today’s customers are demanding.

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