Cloud new in Banking? They’ve been doing it for years

shutterstock_113828068People are nervous about using the cloud for IT service delivery. Where is my data? Who has access? Is this the right Service Level Agreement for me? All valid concerns.

All valid concerns that every bank answered many years ago for some of their most critical applications and data.

In banking, trusting an external services supplier is a sensitive issue: financial information is  highly vulnerable, and extremely desirable to people with motives at the shady end of the scale. Add to this the substantial compliance and regulatory frameworks to which the banks are beholden, and penalised substantially for not adhering to, so the thought of trusting someone else to hold and deliver this critical information becomes too painful to even contemplate.

In investment banking IT, the front office rules. (There is a reason the news updates are always shown from the expanse of the trading room.) The front office issues the most demanding support SLAs for the IT department, demands the latest technology and the biggest application teams. Yet some of the most critical and sensitive trade data is held within hosted applications and databases provided by the market data companies.  Applications from Reuters and Bloomberg have been sitting in trading rooms for years.  whilst those initial applications were run locally, on dedicated terminals, the data was hosted remotely in secure data centres in all the key financial centres across the globe.  Now even the applications are hosted. Look at the description for the Reuters 3000 Xtra hosted terminal:

  • Lightweight desktop hardware requirements
  • Highly secure, on-demand mobile and device-independent access
  • Reduced TCO from extending the useful life of devices and networks with minimum in-house administrative and technical support requirements
  • Application maintenance managed centrally

Sound familiar? It should if you’ve been anywhere near requirements for external IT service provision recently.

I know you’re shouting: specialised, hosted delivery of applications and data is not cloud. I agree – but there are lessons that are equally applicable. If our objective is to get to flexible, cost-effective, non-capex, secure delivery of IT services then we already have a model of the criteria and decision processes that allow us to do just that.  So before dismissing the ‘cloud in banking’ proposition ask yourself a few questions first:

  • Where is my data today?
  • What external services am I already using? Why do I trust them?
  • What existing internal services can I move to external providers with a similar ‘trust profile’?

The hardest part: the initial outsourced delivery of applications and data was done years ago. Time to take a small next step?

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