The rise of hybrid cloud in financial services
Finance companies today are required to maintain high compliance levels and be capable of generating world-class services to their customers. Industry experts are now suggesting that the hybrid cloud has provided a platform for finance professionals to deliver a sustainable and profitable future.
The finance market includes a number of new technologies. The rise of security concerns, data privacy and compliance have all affected the cloud systems that banks and other financial organisations have developed. Research provided by the IBM Institute for Business Value reported that during 2019, the banking industry investment in cloud services is forecasted to hit $100 billion (USD). IBM believes that the cloud has become an essential part of progression in banking. IBM identifies six vital attributes including cost flexibility, scale, market flexibility, hidden complexity, variation and ecosystem connection all influence the efficiency levels but also are directly connected to business transformation and revenue change.
The integration of a hybrid cloud strategy has been relatively slow, driven by security concerns and a potential loss of data control. Reports, however, suggest this is changing, with a study by Nutanix stating that the financial industry is ahead of other sectors in terms of integrating hybrid cloud.
Chris Kozup, the SVP of Global Marketing at Nutanix explains that rising competition, along with higher security risks and emerging regulations will mean the industry needs to focus on enhancing IT infrastructure. Kozup states that the higher than industry average adoption of hybrid cloud indicates that financial businesses understand the benefits of hybrid cloud systems and their impact on agility, security and overall performance.
As FinTech continues to transform the industry, financial services that utilise the hybrid cloud will be competitive and enable further innovation. John Van Decker, the VP of Gartner explains that studies indicate that over 90% of enterprises believe the cloud can be used for over half of business transactions in the near future. Van Decker believes that the cloud has dramatically changed the shape for financial business applications, highlighting that many vendors have updated their platforms in the cloud and many have reduced their on-premise solutions and replaced it with more profitable cloud implementations.
Dr. Richard Harmon, Director at Cloudera states that open banking is enabling FinTechs to collaborate with financial organisations, providing and delivering innovative products and services that customers want. Harmon believes a hybrid, multi-cloud infrastructure has become the perfect area for businesses to tackle some of the most challenging data and analytic issues in the industry. Harmon states that some of the biggest FinTech businesses are capable of using the hybrid cloud to generate core services within data engineering, data warehousing and data science.