Today, cloud is an inescapable part of how banks and financial services organisations operate.
If they want to stay agile, manage costs, launch new products quickly and deliver a better customer experience, cloud is essential. However, even allowing for the accelerated cloud adoption that kept operations going during the pandemic, cloud take-up in the financial sector lags behind that of other industries, potentially due to concerns about compliance and security.
So far, financial organisations have gone for easy cloud wins: new services migrating simple applications or those that were already built to be cloud native. Plus, much of their cloud activity has been focused on running more easily managed private clouds, rather than venturing into the public sphere. As recently as October 2020, Accenture found that the average bank has 58% of its workloads in the cloud – but that the majority are in private cloud data centres.
For many financial services organisations, control is the big sticking point when it comes to public cloud. So, what are the industry’s key control concerns, and how can they overcome them?
Cost control is a significant issue
When I talk to financial services organisations, controlling the costs of public cloud comes up time after time. In fact, increasingly, organisations are bringing me the results of having lost control of costs. This is something industry analysts predicted, with estimates of up to 80% of organisations overshooting their cloud budgets for 2020.
Many organisations find costs have spiraled because of the sprawl of shadow IT. In the scramble to keep operating and innovating during the pandemic, different departments made unilateral decisions to adopt cloud solutions. Organisations now don’t necessarily know about all the cloud services they’re paying for.
Others have found costs increasing because of the way they’re making the move to the cloud. Initially considered straightforward services, as they move to the cloud can surface complexities due to required integration with other cloud or non-cloud services, particularly when they’re adjacent services required to meet regulatory obligations. Financial organisations are finding out the hard way that adoption at scale requires significant change to their IT architecture and existing operating models.
Evidence is emerging that, on average, organisations are underestimating the cost of their business cases by 30%, largely because they have underestimated the full costs of implementing end-to-end solutions or of training staff to manage them. It doesn’t help that the savings quoted as headlines depend on operating optimally, and don’t look at what needs to be done to realise the full business case.
Plus, financial organisations often don’t realise that managing cloud is different from managing traditional IT – and if you get it wrong, it’ll cost you money. Take the fact that you procure cloud in a different way. For example, you don’t need to build over capacity into your design, because it’s easy to spin up extra capacity just when you need it, so you only pay for what you use.
The good news is that, because financial services organisations are relatively late adopters of public cloud, they can learn from the experiences of other sectors, and make wiser choices.
Controlling security in the public cloud
Security is another issue around control that comes up – unsurprisingly for a highly regulated industry that depends on being able to keep data safe. Security in the public cloud is a new area for financial organisations’ IT teams. It’s a big switch, going from a clearly delineated set of operational responsibilities where the team (or a partner) has full control, to a set-up where the cloud provider just makes security services available for you to use if you want. It’s a difficult area to navigate: a recent Accenture survey showed that 82% of banks look to the cloud for improved security, yet 52% of executives ranked it also as a top barrier.
This all requires new, specialist security skills to do effectively – but these are in short supply. Financial organisations are telling me that they’re losing a lot of their specialists with cloud security skills to the tech giants at the moment. In the Accenture survey, 41% of respondents ranked ‘lack of cloud skills within the organisation’ as one of their top three barriers.
Introducing Cloud Control for financial services
We understand the urgent need financial organisations have for public cloud to drive the innovation that’s essential for powering out of the pandemic, all while staying secure and maintaining regulatory compliance.
Our Cloud Control for financial services delivers cloud simplicity, with as much or as little management from us that you want. We combine your choice of clouds – private, public or data centre – with all the connectivity you need to deliver outstanding experiences. To this we add a high degree of control to make sure your workloads are in the right locations and are optimised so you get the best possible performance. And we build security in by design, so you know your data is safe and you’re complying with all regulation. Cloud Control for financial services offers a single, end-to-end solution that lowers the risk and increases the reward from your cloud transformation journey.
To find out more about how Cloud Control can work for you, please get in touch with your account manager.