Hybrid Cloud in Banking: Best Practices for a Smooth Transition
A short time ago, banking had physical branches, paper records, and set procedures. But things have changed. Customers today demand smooth, individualized, and quick services, and banks are always under pressure to meet these demands. Traditional IT systems just cannot keep up with the rapidly growing fintech disruption, the explosion of data quantities, and the changing rules. Because of this, more banks are using hybrid clouds. It gives you the freedom to innovate fast while still having the security and control that the business requires.
In this blog, I will discuss a handful of best practices for implementing hybrid cloud computing in banking sector.
Handy Best Practices to Keep in Mind While Implementing Hybrid Cloud Computing in Banking Operations
- Identify clear deployment goals: Before you go about any technical implementation, it is imperative to first clearly define the goals for a hybrid cloud. This means you will need to determine specific business objectives and how hybrid cloud adoption will help said objectives. It is also critically important to identify the business drivers, whether they are cost savings, improved disaster recovery, etc. Oh and don't forget to take a comprehensive inventory of existing applications and infrastructure to assess the current landscape.
- Ensure regulatory compliance: The financial industry is highly regulated. That is neither a secret nor news. So banks' hybrid cloud implementations must remain compliant with numerous regulations. And before migrating any data or apps, be sure to undertake comprehensive risk assessments, including assessing potential security vulnerabilities in the cloud environment. Robust audit trails and logging capabilities must also be implemented throughout the hybrid environment to ensure that all activities are tracked and auditable for compliance purposes.
- Pick the right cloud partners: This is a critical decision that will have ramifications for the entire hybrid cloud strategy. This is why experts recommend that all potential cloud partners on your shortlist should be assessed according to their technical capabilities and service offerings. Of course, specialized financial related services, such as data analytics or blockchain expertise, must also be evaluated. Due diligence must also be conducted on the service providers' security and compliance certifications.
- Don't lose sight of data security: This is a nonnegotiable, especially in the banking sector. A hybrid cloud environment introduces new complexities, necessitating a comprehensive security strategy. Besides a zero-trust security model, use of strong encryption everywhere with robust encryption algorithms and secure key management systems is also advised.
- Integrate legacy systems: Banks frequently have complex legacy systems that are critical to their operations. But integrating these into modern hybrid cloud environments tends to present a significant challenge. You could take an API first approach, should be taken, exposing legacy system functionality via APIs to create a standardized way for new cloud native apps to interact with older systems. For data stored in legacy databases, I recommend using data virtualization to create a unified view of data from multiple sources.
- Set up robust governance policies: A clear and documented governance framework should be created to outline policies and responsibilities for managing the hybrid cloud. You should also implement tools that provide a unified view for monitoring and managing operations in both on premises and cloud environments.
Final Words
In order to remain competitive in the rapidly changing financial sector, banks need to adopt cloud computing as a tool for business transformation as well as a technological change. Applied carefully, hybrid cloud provides the ideal ratio of innovation, security, and scalability. By adhering to the proper best practices, banks may improve client outcomes, future-proof their operations, and stay resilient in the face of growing fintech competition and shifting market needs. These practices range from establishing clear goals and guaranteeing compliance to selecting the finest partners and protecting data. Now, all you need is an expert service provider for cloud computing in banking sector to get started.
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