We reveal six scenarios for using the cloud to solve the challenges of the finance sector, illustrated with industry case studies
It's no secret that the financial services market has changed dramatically over the past decade. Thanks to digitalisation, many banks and insurance companies have partially or completely switched from providing services offline to digital. In 2021, according to PWC analysts, online services will be the priority for financial sector players, and cybersecurity threats will be their main risk.
Experts from IBM say the same, noting a new trend among banks, insurance companies and financial technology firms. It is called the cloud-first strategy, where cloud computing is given priority in the business infrastructure.
G-Core Labs, an international provider of cloud and edge solutions from Luxembourg, has been developing cloud services for companies in the financial sector, media business and retail for more than 10 years. Our server infrastructure, based on Intel technologies, is located in 100 + points of presence on five continents of the world, and over the years we have accumulated experience and understanding of the IT needs of various companies.
Let's examine several scenarios in which financial sector players use cloud technologies to solve their daily tasks.
Cloud for speeding up development and release of products and services
In large organisations with traditional IT systems, developers often face the issue of waiting for resources. It can take several weeks or months from the initial application to obtain the required capacities, giving competitors time to bring new services and features to market. However, thanks to cloud infrastructure, developer access to the necessary resources is streamlined: using a self-service portal, they can get capacities in minutes, not months. At the end of the reporting period, the service provider simply issues a detailed invoice for actually used virtual machines with per-minute billing.
The Royal Bank of Canada, Canada's largest bank, has been using cloud infrastructure since 2018 to speed up the development of its software products. It is noteworthy that this project is not just a consequence of optimisation, but part of the implementation of the bank's global strategy to transfer business to the Data-Driven Enterprise segment.
The demand for cloud solutions to speed up development is highly relevant to G-Core Labs customers. This is especially true for large companies, where security is a strong focus, and giving new employees and external partners access to internal resources takes longer than getting virtual machines in the cloud.
Cloud for ensuring infrastructure stability
As a business grows, so do the requirements for infrastructure, reliability and speed of recovery in case of failures. Data loss can result in large financial and reputation loss for a company, so the ability to quickly back up data is critical for most platforms - from billing systems to websites. A backup may be also needed to protect against employee errors and to quickly deploy services in the event of force majeure.
Sound Community Bank, one of the largest banks in the state of Washington (USA), began using the cloud in May to back up its archives. The bank manages $715 million for customers from more than 15,000 companies and households. Sean Bornicke, head of technical support at Sound Community Bank, said the constant growth of user and customer data, and the limited capacity of the bank's own storage, made it difficult to update the local backup system, creating risks for the smooth operation of the business. That's why it was decided to migrate to the cloud, with which the bank is completely satisfied.
G-Core Labs offers its users the option to back up data on servers in different countries, which provides additional options for recovery even in the event of serious disasters
Cloud for quick infrastructure scaling
Financial companies can face an explosion in user data or transactions as a result of changes in market conditions, new products, or emergencies. At the same time, it is seldom possible to predict when such growth will occur, so financial institutions must be able to quickly scale their infrastructure, expanding processor capacity and RAM.
The G-Core Labs cloud can provide this opportunity at any time. With its help, a customer can deploy infrastructure for new business units in a few clicks, connect additional virtual machines to 'hold' the website during periods of high demand, scale the payment platform, and so on. Solving such problems by purchasing one's own backup equipment, on the one hand, requires significant financial and time investments. It also creates an increase in the operational load on the IT department, which must maintain and support these additional capacities which will be idle for a large portion of time.
Cloud for deploying AI and Big data applications
Thanks to the cloud, banks, insurance and fintech companies can gain access to the enormous computing power needed to build heavy AI and big data applications. This does not require creating or building out one's own IT infrastructure, or hiring additional staff. For example, Shanghai-based SPD Bank was recently made an honorary member of the Cloud Native Computing Foundation for its active use of cloud technology in application development. Using the cloud since 2017, the bank has been able to develop and implement more than 60 applications that use artificial intelligence, including critical ones.
G-Core Labs sees great promise in the development of applications based on big data and AI. Therefore, within our cloud, we are developing an AI platform that provides every developer and data scientist the ability to quickly create, train and deploy machine learning models. Within the cloud AI platform, in addition to supporting full cycle machine learning, users have access to a catalogue of ready-made templates and models with continuous delivery and real-time technical support. On the basis of the G-Core Labs Cloud, it will be possible to deploy big data applications based on Hadoop clusters from May this year.
Cloud for hosting virtual desktops
Deploying call centres, customer support services and a back office for temporary and seasonal projects usually requires a large number of remote employees. The advantage of a virtual desktop is that it's much easier and faster to deploy or remove as needed. In addition, the introduction of virtual desktops greatly facilitates the process of centralised team management and control over work performance.
Another advantage of the cloud workplace is saving money by not purchasing expensive equipment, which is especially important in times of crisis. For example, The State Bank Group, an American bank with a net worth of over $230 million, was forced to move 70 per cent of its employees to remote workplaces as a result of the pandemic. This step allowed the company to not only avoid massive layoffs, but also to adapt the business to the new realities in the shortest time possible.
Cloud for working with user data
Cloud infrastructure significantly reduces the cost of storing user data, but the question remains, how reliable is the protection of personal information about customers and partners of banks and insurance companies? In this regard, today, the financial sector is actively introducing so-called hybrid clouds, allowing for the separate storage of anonymised and private data. Primerica, one of the leaders in the US insurance market, uses a hybrid cloud for more flexible management of various categories of personal data.
G-Core Labs also offers its customers the option to deploy hybrid solutions, or to provide a secure loop in the public cloud located in the customer's own security perimeter.
Moreover, the G-Core Labs cloud has successfully achieved the certification of compliance with the requirements of the PCI DSS 3.2.1 standard in terms of storing, processing and transmitting payment cards data. The presence of an internationally recognized PCI DSS certificate confirms the high level of protection of cards users personal information in the company's cloud. This is especially important for the financial industry, online retail and any business that accepts payments with cards.
A few words on G-Core Labs Cloud
Today, to be successful in a highly competitive environment, online companies (including banks, insurance & fintech companies) need quick access to powerful high-quality development and business operation tools that can be scaled up as soon as such a necessity arises.
G-Core Labs Cloud is a multifunctional data centre that is available at any time from anywhere in the world, allowing you to deploy unlimited virtual resources in just a few clicks - without leaving your home or office and without buying the expensive necessary equipment. With the help of G-Core Labs Cloud, any business will be able to speed up its development, testing, and launching processes several-fold, and with the minimum infrastructure costs.
Our cloud services are powered by Intel Xeon Gold 6152, 6252 and 5220 processors, have up to 1 TB of RAM and SSDs and HDDs with triple replication.
The G-Core Labs cloud is based in Luxembourg, Ashburn (USA), Singapore, Moscow & Khabarovsk; Frankfurt, Sidney and São Paolo are to follow.
Vsevolod Vayner is head of cloud platforms at G-Core Labs.