Marc Benioff, CEO of Salesforce, famously said:
“If someone asks me what cloud computing is, I try not to get bogged down with definitions. I tell them that, simply put, cloud computing is a better way to run your business.”
And this is exactly what banks and financial institutions are aiming for as they begin to embrace the cloud. Historically banks have been averse to adopting cloud technologies, mostly on security and compliance grounds, but given the disruptive forces shaping this industry, the need to innovate quickly and maintain differentiation is critical. Gone are the days when institutions had to struggle to bring new products to market due to long cycle times to procure and provision IT infrastructure equipment and build, deliver and implement applications.
If they want to stay ahead, as the regulators have realized, the cloud is no longer a nice to have. It’s increasingly becoming a must-have, and the benefits are hard to ignore: increased IT agility and scalability, operational efficiencies and the ability to expand in new territories with zero upfront capital investment. And industry visionary Michael Harte, former CIO of Commonwealth Bank of Australia was speaking to those benefits when he said, “We will never buy another data center.”
Cloud Adoption’s Steady Rise in Financial Services
Most banks starting out use a cloud-based infrastructure for application development and soon broaden the scope to include application testing and production. They tend to start with lower-risk applications such as customer relationship management, basic office tools and infrequent non-sensitive workloads such as testing and analytics to model the risk of a new product for instance.
Many banks, including Wells Fargo, Barclays, Northern Trust and Huntington National Bank, use Salesforce cloud-based customer relationship management software. BBVA, one of the largest financial institutions in the world, is banking on the cloud to provide more than 100,000 of its workers worldwide with Google Apps for email, document management and collaboration. Global banks, such as Goldman Sachs and Bank of America, are using public cloud services to test software.
Per a Forbes article, Bankinter in Spain and Commonwealth Bank of Australia are seeing tremendous savings from cloud adoption.
Expect More “as-a-Service” Deals
Driven in large part by the need for digital transformation, financial institutions are starting to leverage cloud computing to rapidly deploy desktops and applications including cloud-hosted desktop DR (Disaster Recovery) as an easily managed, integrated cloud service to any device, anywhere at an affordable price. They are choosing among different cloud-deployment models—private for more sensitive data, public to store other information or hybrid that combines the two—that help them best meet their specific requirements. Although many financial services organizations will see immediate benefits in discrete private and community clouds, the ability to move workloads between clouds will make a hybrid cloud model attractive as companies’ cloud visions mature.
To this end, we see opportunities in three areas:
1) Desktop as a Service (DaaS)
An ever-increasing proliferation of endpoint devices, coupled with the rise of the cloud and end users’ demand to access their data and apps without location restrictions on any device, has made desktop management more complicated than ever before. Desktop as a Service (DaaS) delivers a secure virtual desktop for businesses on nearly any device. As IT expects to manage environments with a combination of physical and cloud-based desktops, as well as a host of virtual applications, DaaS offers these administrators the ability to deliver virtual desktops on demand on almost all devices without the hassle or cost of managing on-site legacy infrastructure.
In banking one of the key use cases that we see for DaaS is supporting users in branch offices. Many branch offices don’t have experienced IT professionals onsite, so when users have problems with their devices, it is a complicated and expensive process to either fix or replace them. Virtual desktop infrastructure (VDI) can address these challenges, but VDI requires an upfront investment in incremental infrastructure. With cloud-hosted virtual desktops, however, IT can cost-effectively improve provisioning, security and speed of deployment for branch offices, without having to worry about building a new backend infrastructure or expanding an existing one. Ongoing support becomes much simpler, as there is no need for local IT staff.
The other use case we see is in risk analytics and modeling. Many financial services companies need to run complex models or perform advanced computations. By moving these workloads to the cloud, they don’t have to worry about giving employees expensive endpoints that can handle that computing power. They can run compute-intensive programs with ease from powerful cloud desktops from virtually any device, be it a smartphone, tablet or laptop.
Read how Fidelity is enabling financial advisors with access to a new cloud-based virtual desktop solution.
[Read about the 5 Top Use Cases for DaaS.]
2) Applications as a Service
In a recent Finextra blog post titled, “The State of IT Transformation in the Financial Services,” 75% of respondents from the world’s top financial services organizations stated “they had goals of evaluating all of their applications and working towards cloud workload placement.”
Imagine delivering apps at a daily cost that’s less than your favorite cup of coffee—while ensuring your employees have secure access to the applications and data they need anytime, anywhere. At the same time, you don’t have to worry about over-provisioning and over-paying for your infrastructure.
So whether you are providing access to portfolio allocation or asset management apps to a mobile financial advisor, mortgage app with real-time mortgage rate information and payment calculators to a broker on the move or onboarding new employees post a bank merger or acquisition, providing instant, secure and reliable access to applications anywhere on any device boosts employee productivity, improves end-user experiences and simplifies IT infrastructure.
[Learn more about Horizon desktops and apps as a service here.]
3) Desktop Disaster Recovery as a Service (DRaaS)
In an age where being offline is unacceptable, companies, especially banks and other financial institutions providers that have always-on business demands, are expected to provide their users with consistent access to data and applications.
- What if you could guarantee always-on connectivity and ensure access to corporate resources when disaster strikes?
- What if you could get your workforce up and running in as little as eight hours, at a fraction of the cost of traditional DR?
- What if you could purchase a desktop DR plan for as many or as few of your workers as you want?
- What if you could choose recovery SLAs: 8, 24 and 72 hours?
What if you could do all of the above and NOT have to manage operations of the desktop DR infrastructure, including security, backups and ongoing monitoring?
When Sandy, the hurricane/coastal storm hybrid, hit the northeast in October of 2012, it gave business continuity plans of companies of all sizes a jolt. Even the New York Stock Exchange’s trading floor was out of commission for two days, the longest weather delay for the exchange in 124 years! While the NYSE couldn’t have operated without traders on the floor, there were other banks that could have been up and running if they had a DR plan in place. That was a moment of reflection and pause, and we have a come a long way since then. In fact in March 2016, the Federal Reserve Bank of New York revised a policy “requiring primary dealers to ensure their backup trading systems are more spread out in case of disruptive events,” reported The Wall Street Journal.
[Learn more about VMware Horizon Air Cloud-Hosted Desktop DR here.]
[Read the whitepaper The Smart Disaster Recovery Strategy for Your Workforce: Cloud-Hosted Desktops.]
Conclusion
It is true that banks and financial services (FS) firms have been slower to embrace the cloud than their counterparts in many other industries, but what is perceived as being slow-adoption is, in fact, nothing less than a commitment to security and data privacy. Security is critical—no matter where you run your workloads whether it’s a public cloud environment or in a private data center. While the ongoing debate on security, compliance and privacy concerns with respect to large-scale cloud adoption continues, it is heartening to see a conservative industry take some bold steps in that direction.
In an article in CIO.com, World Bank’s CIO Stephanie von Friedeburg , talks about her institution’s paranoia accompanying the public cloud. However, that did not deter her from pushing her “Cloud First” strategy with office productivity tools such as Box and Office 365 for 30,000 employees in 186 countries around the world.
There are always the Luddites and the naysayers who say they don’t want to change. And then there are the institutions that have created a blueprint for “Intelligent Working” to empower a new operating model—and a new way of working.
Which camp do you belong to?
[Learn more about Secure Digital Workspace for Financial Services here.]
