For financial services institutions, the competition to gain competitive advantage is fierce. Many factors can set you apart from the pack: a few microseconds of advantage in a digital trade; your network uptime; the responsiveness of your customer service; or the ability to quickly and rapidly scale operations to meet market demand.
These are also some of the reasons why financial services firms are shifting to a hybrid IT model, and moving away from solely operating on-premise infrastructure. The new model incorporates on-premise systems along with colocated facilities, private cloud and public and multi-cloud services.
Organizations that have this combination available can select the most appropriate architecture for each individual workload, based on cost, speed, latency, performance and other factors.
As an industry, financial services has a reputation of being risk averse when it comes to IT, and for good reasons. In a highly-regulated industry where privacy and security are non-negotiable, financial services businesses have historically operated their core applications in-house, on-premise or at a colocation environment. It meant they could implement end-to-end security and retain a high level of control over their data and applications.
However, competitive pressure from digitally-transformed rivals, or cloud-centric start-ups, drove many organizations to transfer certain workloads to the cloud. It offered new advantages and a way to extend the functionality of legacy IT and evolve the company’s network architecture.
More recently however, financial services businesses have evolved further, pursuing a more diverse hybrid IT strategy. Yugal Joshi, Practice Director at Everest Group, says, “Our research indicates that 77% of enterprises are actively pursuing a hybrid cloud strategy, with 1 in 3 migrating their production workloads to the cloud.”
As a result, the selective deployment of applications within cloud, colocation or on-premise environments signals a shift toward a more rounded and mature approach to IT, rather than a one-size-fits-all, “cloud or bust” strategy.
Hybrid IT infrastructure delivers the best of all worlds: secure and low latency on-premise networking for the workloads that require it; the ability to scale or boost processing for applications that need the flexibility of cloud; and the operational cost advantages and manageability of colocation facilities.
Hybrid cloud is also proving to be an effective platform for running particular data-centric applications, such as blockchain, AI and machine learning, and big data and analytics solutions where data scientists run sophisticated queries on big datasets.
In addition, cloud infrastructure offers automated API-driven processes, enabling end users to request, configure and manage a range of resources and services themselves, with minimal input from IT. This could be anything from database and storage provisioning to AI and analytics on demand.
Furthermore, hybrid cloud adoption fosters innovation, empowering firms to reach beyond geographical, industry and organizational barriers. IBM Research Director, Lynn Kesterson-Townes, says that over 75% of bankers surveyed for IBM’s Tailoring Hybrid Cloud for Banking report said their most successful cloud initiatives had already achieved inroads into new industries; new revenue streams, and expansion of their product or services portfolio.
In its report, IBM cites a leading Australasian bank, which identified customer experience as a priority focus area. It deployed a hybrid cloud solution to reduce time to market and delivered an enhanced mobile experience to its customers in just 12 weeks.
Lastly, hybrid cloud offers cost savings, which is another important driver behind the trend. Research has found that financial services firms gain greater cost flexibility with hybrid cloud by shifting fixed to variable expenses. Public cloud services also enable businesses to operate workloads that require massive data, storage and processing, on a pay-as-you-go basis, instead of having to invest in their own data center technology.
For these reasons, a traditionally risk averse industry has calculated the value of evolving its networking architecture, and is reaping the rewards of a hybrid IT infrastructure.
Partnerships with technology experts like Panduit are an important part of the puzzle. We work closely with our clients, offering our expertise to help them build a flexible, scalable and secure hybrid platform that can encompass on-premise, colocated and public cloud design. Our ability to support your transition into a hybrid IT model will enable you to future-proof your tomorrow, today.