Hybrid cloud boosts innovation, lowers costs in Finance
According to recent data from analyst firm Atos, banks can increase their operating profits by 30 percent through 2020 by embracing more digital workflows. In particular, hybrid cloud is proving to be the preferred avenue for digital transformation in the finance world, as hybrid helps level the playing field between traditional banks and a slew of digital disruptors.
When discussing digital disruptions, it’s not just an indictment on the FinTech startups that are targeting the revenue-generating “add-on” services that banks have historically offered on top of standard checking or savings accounts (ie. payment services, financial planning tools, and other profit-drivers). It’s also about banks shaking off the burden of maintenance- and cost-heavy legacy network infrastructures for more open configurations, which hybrid cloud can help facilitate.
A recent IBM survey of IT executives in the finance space found that, thankfully, many in the industry are hearing the call of hybrid cloud and wasting no time answering it. According to the survey, 75 percent of respondents said their most successful cloud initiatives had already led to expansion into new industries, creation of new revenue streams, and expansion of their consumer services portfolio.
Another survey from Nutanix found that hybrid cloud deployment in finance is outpacing other sectors, with the industry enjoying a 21 percent rate of adoption versus an 18.5 percent Global average.
Specifically, by adopting a hybrid-cloud strategy business-wide, banks can enjoy the following additional benefits:
Hybrid cloud allows banks to switch a large portion of their technology from “fixed” to “variable” expenses. That means that banks costs are now based on output, as opposed to traditional cost models that were tied to “investment in under-utilized capital equipment,” according to IBM. By deploying a hybrid cloud solution that allows a bank to move it’s entire mid-range environment off of hardware and into the cloud, for instance, a bank can retire much of the costly maintenance and management workflow of their legacy system.
More efficient operations
With hybrid cloud deployed business-wide, banks can quickly provision resources across the entire enterprise, speeding up the time it takes to tackle and resolve issues wherever they take place geographically. This can help accelerate go-to-market of new products, for instance, or minimize the downtime customers may face when existing services are interrupted, helping improve brand perception for existing customers.
Hybrid cloud makes the banking business more open without compromising the workflows and data that are subject to regulation or privy to security threats. That means that the barriers between potential partners – both inside and outside of the financial sector – are taken down, allowing for greater seamless collaboration between independent organizations or other industry sectors. It makes sense, therefore, that 75 percent of those bankers surveyed by IBM are already enjoying expansion into new sectors, revenue markets and service offerings.
Connecting all of these stakeholders requires financial IT directors to ensure there is regular visibility between all of the autonomous systems and networks supporting any new hybrid cloud workflows. This requires a network monitoring solution that was built for the cloud, granting IT a look into all of the network environments their traffic flows between.
To learn more about how digital transformation is impacting the financial sector, download our whitepaper, Digital Transformation in Finance: What’s igniting the rapid-fire adoption of new banking tech?