BANKING ON THE CLOUD – MIGRATION AS A LONG TERM STRATEGY FOR IT

Many organisations are migrating to the cloud – applications, services and infrastructure can be run more efficiently by service providers, or by hosting them in private cloud environments. According to IDC, nearly 40% of all data in the digital universe will be in the cloud by 2020.

However, financial services and banking organisations have been more cautious on how they make use of cloud. Partly this is due to the significant data security and compliance requirements that banks are under. Financial data has to be secure and access controlled, as set out by legislation like Sarbanes-Oxley and the Gramm-Leach-Bliley Act in the US and the Data Protection Act in the UK.

While some aspects of banking IT can make the move to the cloud, the sheer size of banking IT operations means that there will be a “long tail” of migrations across the sector for some time to come. For internal IT requirements that don’t touch on personal data, the option to virtualise and build private cloud infrastructure has been evaluated, and in many cases started.

Banks are making the shift over to cloud where they can as the technologies behind cloud become more robust and secure. Around 71 per cent of banking executives stated that they planned to invest in cloud according to a survey by PricewaterhouseCoopers in late 2013 – this was four times more than in the previous year.

As part of this shift to cloud, how services are delivered and managed will change as well. Rather than looking at fixed physical platforms for the long term, cloud computing encourages more agility and flexibility in approach. For IT teams, used to thinking about migration as a “one-off” activity, a change in mindset is called for around workloads and portability.

Because businesses—and the banking industry, specifically—will continue to evolve to address growing data input demands, the modern data centre will need to be nimble in order to reflect the constant flow of information across increasingly diverse origins and destinations. The sooner companies can realize the efficiencies enabled with technology that does not rely on like-system migration, the sooner they will be able to move forward with business development without fear about uprooting their data protection processes given future needs or change. Because migration to the cloud is an increasingly viable option for banks today, IT needs to understand how the process of migration—not just the migration itself—can benefit their business long-term.

Migration should be thought of as something that will be going on continuously, as banking IT teams can look at how to make the shift without impacting on day-to-day operations. As workloads become ready for migration, they can be moved across to new platforms using the same strategy.

Even for internal applications, the move to the cloud can lead to potential downtime that is extremely costly. To avoid this problem, banks are looking at new strategies in order to remove that potential downtime. Business continuity aims to keep business processes and architectures available for users regardless of any challenges like network connectivity being lost or device failure.

The IT teams at banks are experts at business continuity planning, as their systems include applications that have to be available to users whatever happens. Business continuity planning can be extremely helpful within migration projects, as it can provide ways to reduce the potential impact of downtime.

By using migration tools, like data replication software, IT teams can shift server images and data across to new cloud platforms without having to take the original systems offline. This can not only cut the risk of a migration failing, it means that the team can go back to the previous platform without too many problems.

This whole approach around workload mobility aims to provide banking IT with a degree of flexibility and agility that is not possible when you are wedded to specific hardware or storage platforms. By decoupling the workloads from the operating systems, storage layers and servers underneath them, bank IT teams can deploy those applications where it makes the most sense – both for performance and economic reasons.

For the banking sector as a whole, cloud computing can be used to support some key customer-facing applications and services across the many facets of their business activities. Gartner estimates that consumers will initiate at least 10 per cent of all banking transactions indirectly via cloud-services based portals and exchanges by 2015.

For banking IT teams, the move to the cloud is part of a longer-term strategy around picking the right platforms for applications. However, these decisions are not all-or-nothing moves; by putting the right workload mobility strategy in place, banks can remove some of the risk and challenges that exist around migration.