As Amazon Web Services (AWS) and other cloud service providers continue to gain ground, many banks are moving their fintech applications to the cloud. They have sound reasons for doing so, as cloud computing saves costs, boosts efficiency, and offers layered security approaches as well as automated deployment models. Moreover, the barriers to entry are lower than ever before.
Lower-cost, more efficient
Cloud computing is less expensive and more efficient than traditional computing in a number of ways. With cloud services, organizations only pay for what they use; they don’t have to permanently scale up their applications for peak usage. They can use resources only as they are consumed, and they can “spin up” and “spin down” software environments as needed. For example, if the organization is developing a new application or feature, it can turn on that application or feature only during the day while in development. If using AWS, developers can write code that programmatically establishes its software environments in the cloud. The developers send the code scripts to AWS, which sets up the environments just as the developers want them.
Using cloud services can also allow organizations to reduce headcount or redeploy staff. After they move to the cloud, many organizations are able to dispense with the data centers and middleware they once needed to run their applications—and thus can redeploy the associated staff. Typically, organizations using the cloud do have to add “DevOps” staff—a combination of software developers and IT operations staff—to develop and operate cloud-based applications. A DevOps team can tackle innovation much faster than traditional development teams, as the cloud enables rapid development from code to production, since each stage is completely scripted.
Some banks were once wary of moving their operations to the cloud due to security concerns, but the cloud has since proven to offer significant security advantages. As a first layer of defense, banks can take advantage of everything that cloud service providers like Amazon and Microsoft do to ensure security. Then the second layer of defense—SOC 2 audits, locking down access and authorization rules, etc.—is easier to set up in the cloud. Organizations can set up individual tech stacks in the cloud that include all of the security layers, firewall rules, IP limits, etc. needed. These are defined by source code, so the organization can track changes to the environment over time and easily diagnose any issues caused by those changes.
Low barriers to entry
Cloud service providers offer all of the infrastructure needed to deploy software, making barriers to entry lower than ever. Data is readily accessible to authorized users through the cloud, and creating databases is relatively easy, because cloud providers typically offer the latest analytics and storage capabilities. Monitoring is also significantly simpler, as cloud services enable automatic alerts to be set up and include components that monitor CPU usage, network traffic, etc. Moreover, organizations do not have to purchase large servers with extensive memory for their applications; they just use the cloud provider’s servers instead, as needed.
Moving to the cloud
If a bank is considering moving its fintech operations to the cloud, the best approach is to start with just one application. Once that application is up and running, and any kinks have been worked out, the bank can begin moving multiple applications to the cloud. Xtensifi works with financial institutions to help them determine which application(s) should be moved first. Ultimately, the bank should plan to have as much of its operation as possible in the cloud and to have its own data center as an extension of the cloud. Once its operations are in the cloud, the bank can develop and innovate at a faster pace than ever before by taking advantage of the infrastructure and state-of-the-art capabilities cloud-services providers have to offer.