Banking on Cloud: From Adoption to Acceleration

Arun Krishnan, Global Head of Engineering, Infosys Finacle and Wiley Battle, Global Head, Partner Development, AWS come together to explain the coming developments in cloud computing for banks and the key services they will be providing the market into the future.

Over the last two decades, cloud computing has been one of the biggest technological disrupters. In the Middle East alone, 71% of organisations already use the public cloud and 86% expect to move more data to the cloud by 2026, per a Cloudera report. According to a report by the International Data Corporation (IDC), the Middle East cloud computing market is expected to grow at a compound annual growth rate (CAGR) of 25.2% from 2020 to 2024.

Banks operate in an increasingly dynamic, contact-free environment. Reports suggest that by 2030, banks are expected to leverage Cloud, API and 5G to become connected, insights-driven and seamless. Cloud can help banks improve security, expand their ability to handle data and offer their customers access to new delivery channels. Banking technology is increasingly relying on cloud to achieve agility, scalability and flexibility.

Banks have accepted the idea that an end-to-end managed services banking platform on the cloud empowers the bank with sharper focus on delivering core businesses value and scaling operations. Banks can thus look forward to a steady stream of innovations and lower the total cost of ownership (TCO), with quicker time to market. For example, Finacle’s digital banking solution suite on AWS has helped several customers achieve greater business agility, lower total cost of ownership, automated intelligent operations and a robust ecosystem innovation.

Finacle’s cutting-edge cloud-native architecture, powered by AWS, accelerates cloud transformation journeys and unlocks new value for our clients. Finacle’s Digital Banking Suite on AWS offers managed services that are designed enhance business agility at reduced costs. Key benefits include streamlined operations, superior performance, massive scalability and robust high availability. Banks benefit from Finacle’s resilient, self-healing, auto-scaling and low-maintenance digital banking platform to scale their cloud success more quickly,” says Arun Krishnan, Global Head of Engineering, Infosys Finacle.

Wiley Battle, Global Head, Partner Development, AWS

“AWS has the most extensive global cloud infrastructure. The AWS Region and Availability Zone model has been recognised by Gartner as the recommended approach for running enterprise applications that require high availability.  No other cloud infrastructure offers as many Regions with three or more Availability Zones connected by low latency, high throughput and highly redundant networking,” says Wiley Battle, Global Head, Partner Development, AWS.

Banks in the Middle East region, like their global counterparts, are looking to leverage new cloud infrastructures to drive digital transformation. A recent KPMG report suggests that banks in the Middle East recognise the necessity for a Cloud Center of Excellence (CCoE) that helps financial institutions upgrade applications and standardise cloud adoption across the organisation.

Leveraging cloud is not limited to just moving current workloads. It enables the reimagination of service content as well. For example, Risk management could be one of the non-obvious opportunities from cloud. Cloud can be a valuable way to help risk teams respond quickly to changes in the external environment and better understand the drivers of risk in ways that were not possible before, without requiring current levels of capital outlays. This includes both financial risks such as credit, market and liquidity, and nonfinancial risks such as cybersecurity, fraud and financial crime.

As cloud adoption accelerates in the next year, we can expect four trends to stand out. These include the evolution of Kubernetes and service meshes, the emergence of hybrid could, cloud-native CPUs, and edge computing.

Containers and service meshes have become mainstream

Kubernetes is the new cloud OS. Service meshes facilitate super-efficient, resilient and consistent deployments that are indispensable for complex service delivery. Service meshes enable a consistent construct spanning several clusters or even multiple clouds. This offers banks the ability to have a common language and skills that scale their solution and services landscape.

With the rapid containerisation of applications, banks have the option to combine VM-based apps in the same Kubernetes cluster. The idea of multi-tenancy with the limitation of one size fits all can be challenged using hyper personalised multi-tenancy that is made possible with this tech. Blockchain networks are also leveraging the orchestration, low-touch administration and reliable operations enabled by Kubernetes and service meshes for running their massive, distributed infrastructure.

Hybrid cloud

Hybrid cloud models are fast emerging as the preferred choice for many banks as they enable them to progressively deploy workloads across public cloud, private cloud and even on-prem, basis the criticality of the workload and banks’ risk appetite. In 2023, a cloud-neutral, hybrid approach will enable banks to improve system availability and resilience, while fulfilling data residency requirements in various locations.

We can expect new variants of these models. For instance, with regulations prohibiting certain data from being put on the public cloud, we can expect public cloud providers to offer tools to bring managed computing assets within data centers. Similarly, we could see banks put their secondary disaster recovery setups on the public cloud, while maintaining the primary ones inside their data centers.

Cloud-native environments with purpose-built hardware

Today, CPUs are being purpose-built for the cloud with designs that leverage insights about common cloud workloads to achieve higher throughput at a lower cost; an example is third-generation Graviton processors from AWS. The new-gen CPUs offer higher core density, and up to 50 percent improvement in price/performance ratio while consuming less power.

Increasingly, hyperscalers are offering managed services on cloud-native CPUs as an option. These services enable banks to use emerging hardware with complete interoperability, with managed services interfaces and SLAs.

Edge Computing

Edge Computing is increasingly gaining traction in banking. It brings computational resources closer to the point of data generation, addressing banks’ needs for low latency and data residency. This, in conjunction with other modern technologies such as AI, VR, Computer Vision, NFC and more, will empower banks to curate immersive, context-aware customer experiences driven by high levels of intelligence at the point of consumption.

According to Gartner, we can expect three-quarters of enterprise generated data to be processed at the edge by 2025. As data processing moves near to its storage, banks will gain from improved processing time, heightened data security and cost-effective infrastructure.

As cloud adoption gathers urgency, thanks to factors like digital proliferation and the emergence of platform models, banks in the Middle East will seek to migrate their workloads faster. In turn, we can expect the continuous evolution of banking in the region and the emergence of new and innovative business models. All of this points to the jugular importance of a robust banking platform integrated with cloud services which can provide financial services institutions a secure, resilient, global cloud platform to accelerate the creation and delivery of very valuable consumable banking services for today and the future.