Cloud Computing: What does it mean for financial services?

Part 1

The rapid shift in attitude towards cloud computing continues with the financial services industry being no exception. Cloud adoption remains one of the top priorities for CIOs, so our Cloud Computing blog series explores why financial services and related businesses have not fully adopted cloud offerings for their mainstream applications and services thus far:

Why Cloud?

From a technical perspective, cloud platforms automatically assemble, connect, configure and reconfigure virtualised and logical technology resources to accomplish business goals.

From a business perspective, it eliminates constraints relating to where physical IT resources are located or what specific technologies they employ. This enables the low-cost creation and deployment of new business services on previously unthinkable timescales.

Organisations that need to focus on efficiency and drive their growth strategy by becoming more flexible and agile, developing new markets, channels and products need this kind of flexible and cost effective technology enabler in order to remain competitive in this highly dynamic market sector.  Being first to market can often be the real differentiator and the adoption of cloud platforms is one tool available to financial services businesses, which can assist in this endeavour.

A private Data Centre is more secure, or is it?

The words ‘Public Cloud’ are often used these days, what does that mean to financial services CIOs?  It means, open, available, accessible, uncontrolled and insecure.  The word ‘Private Cloud’ means closed, unavailable, inaccessible, controlled and secure.  Let’s try to dissect the real differences here.

Data Centre infrastructure located within a private or co-location Data Centre is controlled by physical and logical security and access is via a controlled physical entrance or firewall controlled networks.  Often privately owned Data Centre facilities have weak or limited security measures, albeit dedicated co-location facilities typically have improved measures despite the shared nature of their offerings.

In contrast the larger public cloud-computing providers have dedicated, highly secure and expansive facilities globally placed where client access to such are extremely limited and controlled.  For the financial services sector, such controls lend themselves extremely well to adoption confidence:

•             Global footprints

•             Highly secure and controlled access (customer access to the actual compute floors is limited if available at all)

•             Designed, built and operated with scale and efficiency at the forefront

•             Transparent and auditable operational practices

In reality this means the key cloud operators such as Microsoft, Amazon, Rackspace, and Salesforce have physical and secure Data Centre facilities as well as operational practices that cannot be easily matched without prohibitive levels of investment.