Top Hybrid Cloud Benefits for Banks and Credit Unions

As digital transformation strategies drive more customer initiatives, banks and credit unions are changing their views of cloud usage.  Financial institutions are becoming more pragmatic in their approach to gaining operational efficiencies, improving the customer experience, and move beyond their traditional core banking platforms.  Off to a slow, fragmented start, expect to see cloud adoption accelerate.  Gartner expects the cloud computing services market to grow 17.3 percent in 2019 alone, topping $200 billion worldwide.

But banks and credit unions do not operate like every other business; some challenges are unique to these organizations that need to be considered to make a move to the cloud a successful one for all those involved. Because of the nature of their business, the importance of customer account data, proprietary software and service availability, IT staff must be diligent in their approach to deliver digital service and products effectively and efficiently as possible. 

IT leaders are not settling for the all-or-nothing approach when it comes to considering the cloud. Instead, the structure and benefits that a hybrid cloud model offers could be the best option when moving towards digital transformation for those in financial services.

How the Hybrid Cloud Helps Digital Transformation

A hybrid cloud environment combines what is known as the public cloud with a private cloud, allowing applications, data, and services to be shared between the two. The private cloud offers services solely for one customer over the internet from a provider or from within a private internal network. The public cloud provides computing services over the public internet, leveraging infrastructure that is shared across many customers, but keeping data segregated.  It is also allowing banks new ways to deliver simple, lower cost and improved banking services to business customers and improve their retail experiences.  

In the event of high demand, failover, or other exceptional circumstances such as testing or new product development, a hybrid cloud environment allows a business to scale up quickly with little restriction, manage costs and attain the agility needed for their dev/ops environments.   Under this model, a company can keep their data, applications, and services secure and private, but also have the flexibility and compute power to offload basic and non-sensitive tasks to the public cloud allowing them to improve internal efficiency, lower costs and achieve the agility needed to keep up with the digital disruptions rocking the finance industry.  

Benefits of Using a Hybrid Cloud Model 

A hybrid cloud model can accelerate a financial institution's growth of its digital business ecosystem.  A hybrid cloud model delivers a secure, cost-effective blended ecosystem for banks and credit unions, allowing them to maintain customer security and readily partner with other companies for business development initiatives  In particular, a hybrid cloud model can deliver the following digital transformation benefits.

Freeing up Resources for More Revenue Generating Tasks

With some services and data hosted in a public cloud and managed by a service provider, in-house IT staff can turn their focus away from maintenance and management tasks. and toward more high-value work like application development, partner integrations and data management. Because these services are more critical to revenue generation, IT staff with institutional knowledge and understanding of the business environment can spend more time on strategic investment activities and less on preventative maintenance.

Enabling Efficient and Reliable Services

Separating computing resources in the public and the private clouds can give an organization the ability to more reliably and quickly deliver critical services to customers, predict problems. and optimize workloads to prevent business disruptions. By leveraging the public cloud for less sensitive data and services, critical services managed in the private cloud, running on dedicated servers, can securely deliver higher performance and reliability.

Controlling Budget by Leveraging Consumption-Based Costs

Finally, a hybrid cloud model gives financial institutions the ability to offload the risk and cost of maintaining a more substantial infrastructure to meet peak demand. By using both public and private cloud environments, a financial services company can choose where their data is processed and stored and at what cost.  Paying for consumption eliminates the overspend on unused hardware, allows for threshold alerts and in-depth reporting to provide predictable, monthly billing.

This ability to help control steadily growing capital expenditures can be offset with identifying and paying for critical services and typical computing resources combined with consumption-based prices for any additional resources used.

Bringing It All Together

A hybrid cloud model not only offers banks and credit unions the scalability, power, flexibility, and cost savings of the public cloud, but it also allows them to maintain a firm grasp on their sensitive and proprietary information in their own private environment. As financial services organizations continue to embark on their digital transformation, they have a virtual ecosystem to meet evolving customer demands while limiting the capital costs to make it all happen.

To learn more about how a hybrid cloud model can help you digitally transition, reach out to the experienced team at FNTS here.