A cloud-initiated transformation within a financial institution can be the conduit for providing consistent customer experiences on a global scale.
Services are delivered rapidly, effectively and efficiently, making cloud the linchpin of all digital transformation.
Benefits of Cloud
Organisations wanting to be current and future-ready move to cloud infrastructure because it provides business agility, resilience, relocation and recovery. Moreover, it allows for rapid scale-up, ease of addition or integration of additional services and uniformity across vast geo-locations.
Users can enjoy increased mobility and flexibility that will allow organisations to connect with their employees, clients and vendors seamlessly, irrespective of time and location.
While compliance intricacies and risk management concerns are genuine issues, there are established guidelines, protocols and strategies that mitigate these.
Despite all these benefits, business have been reticent and conservative of migration to the cloud. Misconceptions, lack of comprehensive understanding and security concerns continue to prevent a full-scale move.
Legitimate as they are, these concerns may likely be preventing financial institutions from gaining the huge benefits of cloud infrastructure.
To further the urgency, increasing competition from FinTech companies, traditional financial institutions can no longer hold off the concerns they face in digital transformation.
Cloud will be the future of the financial landscape. Hence, the question at hand is not should organisations be moving to cloud; rather, how can the move be made successfully in a phased manner using any combination of on-premises, private, public or hybrid cloud.
No doubt, there are issues to be considered, particularly as financial institutions are dealing with sensitive information that come under the ambit of governance, risk management and compliance.
These are further complicated by regulatory concerns, taxation and financial laws. Adding to this, would be the challenges faced by institutions working in multiple locations and continents where rules, regulations and compliance are determined by the countries they operate in.
“One of the key things we should remember is that cloud is just outsourcing. It doesn’t necessarily reduce the risk, it produces the risk. And the risk is, change.”
On 7th March 2019, senior executives from financial institutions and insurance agencies in Singapore gathered for an insightful discussion on the cloud migration as well as factors hindering the FSI sector from potentially harnessing the benefits of cloud migration.
OpenGov Asia’s Breakfast Insight: Cloud as the Real Enabler of Digital Transformation gave delegates the opportunity to discuss key issues surrounding migration to the cloud, data concerns, key pillars such as people, process and technology as well as the different cloud environments and options suitable for different business functions.
Mohit Sagar, Group Managing Director and Editor-in-Chief of OpenGov Asia, set the tone of the day by speaking about cloud being the enabler of digital transformation and how cloud-based infrastructure is key to delivering flexible, agile, and on-demand access to the services.
Ian Loh, Cloud Service Providers Leader, Dell EMC, created the context for discussion by sharing two critical observations. First was that cloud is legitimate and second was that hybrid cloud is the way forward.
Ian explained that while business plans did not necessarily rest on a Cloud-First perspective, they should embrace a cloud component as a part of their strategy and structure early on.
Taking the discussion forward was Cheong Yen Niap, Go to Market Lead – Cloud Services, Singtel, who spoke about the key challenges in operating cloud environments.
Traditional institutions, according to him, should be concerned about non-conventional FinTech businesses that deploy new technology rapidly, are not risk-averse and are far more agile.
With ubiquitous cloud presence, FinTechs are able to provide customers a wider range of choice, faster and more reliable services, ease of doing business and remote access.
Established banks and FSI agencies have massive investments in physical outlets, legacy structures and mind-sets that hinder them from quickly adopting a pro-cloud stance.
International speaker and cloud expert, John Baddiley, Head of Technology Strategy from Bank of New Zealand (BNZ) shared BNZ’s monumental journey of transitioning to cloud, the challenges they encountered, and their future plans.
The key take-away for the Bank of New Zealand’s journey is that change is essential. Failure to do so may entail irrelevance for the company.
He shared that the changes seen in the financial services sector are driven by the consumerisation of technology.
The expectation of customers is now dictated by the non-traditional banking experiences they enjoy on computer, laptops and phones – anywhere and anytime.
FinTech and other non-traditional agencies follow the ease-of-use patterns of social media platforms and offer similar services to their customers.
From account services, to lending, to investments and wealth management, rewards and loyalty, FinTechs are able to provide all similar services that banks can – but individually.
However, FinTechs cannot replace the overalls service that a traditional bank provides. When unbundled, a bank’s offering consists of about 300 processes, options and services – under one big umbrella.
Thus, instead of being worried about fellow financial institutions, banks must now consider FinTechs as their main competitors and also potential allies and partners.
John described the assessment process undertaken for cloud services as similar to any other service provision: checking into security, data privacy, suitable skills, and availability.
The Cloud Adoption Standards Technique (CAST) is a methodology designed across 7 perspectives that define mandatory standards, implementation techniques, controls and assurance mechanisms for migrating material workload to public cloud.
Each of the 7 perspectives is a specific area of focus. They are:
- Supplier, Commercial and Outsourcing
- DevOps and Delivery
- Data Management
- Service Management
- Business Continuity and Resilience
The Future for Cloud
John concluded his talk by sharing what the future holds for cloud.
We will continue with a hybrid approach for the foreseeable future. Legacy systems remain the main systems of record for reasons of investments and current skillsets, while Cloud computing promises to meet the new enterprise requirements for speed and agility.
According to him, the future is changing today and the continuous growth of the FinTech ecosystem calls for an increased cadence of change.
Delegates of the OpenGov Breakfast Inisght: Cloud as the Real Enabler of Digital Transformation left the session with a far more comprehensive and pragmatic understanding of cloud migration. The genuine sharing of real journeys, robust discussions and insightful interactions provided, not only, food for thought but a better idea for a way forward.