Is Combining a Public Cloud and Own Data Center Worthwhile?

Today, cloud computing is a crucial part of the banking and financial services industry. The American Bankers Association estimates that more than 90% of financial institutions use cloud solutions for some or all of their banking operations.

However, despite the widespread adoption of cloud computing in the fintech space, most banks are still reluctant to move all their assets to the cloud. 10% of institutions reject cloud computing, mainly due to financial constraints and data insecurity.

Nonetheless, banking institutions using hybrid cloud banking have reported significant progress in a number of areas of their business. Let’s talk about hybrid clouds and how banks could use this technology to their advantage.

Typically, hybrid clouds are used in the banking industry to orchestrate and govern application portability to provide a consistent and flexible distributed computing environment for easy scaling.

How hybrid cloud infrastructures are benefiting financial services providers

Banking institutions can take advantage of hosting their application in a hybrid cloud environment in the following ways:

Increase security

Adopting a hybrid cloud strategy for digital retail banking infrastructure will help prevent and minimize the potential damage to the bank’s reputation and finances.

Financial institutions can reduce the risk of data breach by using a private cloud environment for sensitive information and a public one for other records.

Meet regulatory standards for data governance

Financial companies can legally handle customer data by using hybrid clouds. Banking is a highly regulated industry and every application must meet a variety of regulatory criteria.

However, a hybrid cloud solution bank can store sensitive data on its own private server in accordance with data processing and management standards by hosting an application on commercially acceptable public clouds such as AWS.

Implement new approaches

Many financial organizations manage service portfolios that contain legacy applications that do not allow for the addition of new features or components. You may end up finding it difficult to make changes to the current architecture as some older software can be too difficult to update.

However, it is possible to transfer and upgrade your traditional banking infrastructure to a cloud environment that is part of a fintech platform running hybrid cloud solutions.

(CI/CD) Maintaining continuity

Hybrid clouds have accelerated developments in the banking industry by ushering in the era of challenger banks and other disruptive fintech products. And continuous integration, delivery, deployment and development makes this possible.

This allows fintech teams to develop faster and meet deadlines without delaying the ongoing process. A hybrid cloud architecture could also be used to host, test, deploy and secure critical processes.

Improve user experience

The user experience is greatly improved when the core infrastructure is flexible and always available. Few network disruptions and downtimes affect the applications and services while they continue to run.

When banks deploy hybrid clouds on edge servers, network latency is also reduced. Most importantly, information from a hybrid banking cloud can help financial services firms better understand their customers and develop strategies to increase customer satisfaction.

Accelerate time to market

Continuous integration and delivery, as already noted, increase the rate of innovation. Because it reduces the time it takes products to reach the market, this crucial capacity is important in the highly competitive business. In addition, you can update the product after deployment to fix issues or add new features.

Reduce IT costs

IT costs will drop dramatically for applications in a hybrid cloud environment. Remember that faster time to market means fewer iterations of testing, development, and deployment. This can help you reduce expenses, especially when using a time-and-material approach.

Additionally, most cloud providers use a pay-as-you-go billing approach, allowing you to only pay for the resources you actually use, rather than paying exorbitant prices for unnecessary features.

Separate data silos

Despite the fact that a hybrid cloud divides infrastructure into many storage environments, new cloud solutions include features that banks can use to consolidate their data and eliminate siloing.

Increase scalability and flexibility

Because of their versatility, banks and other financial organizations can rely on hybrid clouds. With no network disruption, they can scale operations to meet growing demand. This allows banks to grow their business while maintaining high standards of service and customer satisfaction.

Increase ROI

Hybrid clouds help banks reduce unnecessary spending, which increases overall revenue. In addition, financial institutions can increase the productivity and efficiency of their processes by identifying operational redundancies.

Best practices for hybrid cloud implementation in banking

While there are many benefits to using a hybrid cloud for banking, improper implementation can be detrimental to banks and financial services providers. Let’s take a look at the ideal methods for putting hybrid cloud into practice, some of which we at SDK.finance are using for our latest development – ​​the Hybrid Cloud Fintech Platform.

Use reliable providers

Banking institutions can use private clouds for application and network infrastructure if they can afford the security and maintenance costs. Alternatively, they can manage data-intensive financial activities using the resources of reliable providers such as Amazon Web Services (AWS), Microsoft Azure, Google Cloud, SAP, etc.