Fintech innovation and the cloud: securely connecting the future of banking
Financial institutions such as banks have been some of the most aggressive and largest adopters of cloud, accounting for as much as 16% of total global cloud expenditures, according to IBM.
While initial adoption was typically slower than other sectors, today, 83% of banks say cloud initiatives are already part of a coordinated program or a fully integrated strategic transformation.
The challenge is to ensure that compliance, cyber threats and new risks do not stifle innovation. That starts with how financial institutions network the cloud.
Banks have to find ways to create a flexible foundation for moving workloads to the cloud and maximising the potential of the cloud in their businesses.
No matter where a bank is on its cloud journey, how it connects to the cloud will define its success.
Compliance, complexities and cyber threats
Financial services institutions face some of the most stringent security, regulatory and compliance obligations of any sector. On top of this, they are challenged to keep up with the growing demands from customers for seamless user experience across digital channels like online banking, while not compromising on quality and security.
According to VMware, 80% of surveyed financial institutions reported an increase in cyberattacks over the past 12 months, and 82% said cybercriminals have become more sophisticated over the past 12 months. Due to the high-value data they store, process and transmit, they are a prime target for hackers.
Data security has always been a priority for financial institutions, however the regulatory landscape has surged in complexity in more recent years, with a growing number of compulsory regulations and security policies.
Financial regulators are increasingly establishing standards and guidance around the use of cloud computing, including the Federal Financial Institutions Examination Council in the United States, the European Banking Authority in the European Union and the Monetary Authority of Singapore.
More and more banks are turning to cloud service providers (CSPs) to gain an infrastructure that can provide high availability, data integrity, portability, confidentiality and risk mitigation.
Utilising the cloud is becoming more and more necessary to keep up in a fast-paced market, with the flexibility to ensure compliance with fast-changing regulations and enable continual transformation.
However, the challenge for banks is to find a solution that can provide regulatory compliance, and one that they can trust.
More clouds, more opportunities
There are all kinds of cloud models in the market with different capabilities that suit different business needs, including public, private and hybrid cloud solutions.
Hybrid or multi-cloud environments can provide banks with the flexibility and availability to seamlessly move basic workloads to the public cloud, while benefitting from added data security and privacy by keeping mission-critical data on-premises.
Banks can choose solutions from a number of different CSPs to spread their workloads, and in turn reap the benefits of each provider. This allows banks and other financial institutions to create competitive offerings for customers while retaining security and compliance.
An efficient network underlay can give direct access and advanced levels of orchestration of the data to and between all these providers through a secure and private network environment. The right solution will abide to all regulations and security requirements, so the bank can comply without needing to worry about complexities.
By utilising a multi-cloud networking solution with both a private network and public cloud direct connection capabilities, banks can gain embedded security solutions such as FQDN filtering and service insertion of next-gen firewalls to meet their security and compliance requirements.
They gain high availability networking with default encrypted connections, cloud segmentation and cloud security policies in a single platform, with optimal performance for cloud applications.
On top of this, they can scale their clouds to grow their digital services and meet the usage requirements, as well as having the visibility to continuously monitor system resources such as the network throughput, latency and packet loss.
Keeping up in a rapidly changing market
With banks increasingly using multiple cloud providers to achieve the full flexibility and benefits of the cloud, they need to understand how to connect their clouds and unleash their full potential.
A comprehensive cloud networking solution can simplify connectivity and security in the cloud for banks. It can provide the operational visibility, control and troubleshooting needed to securely connect the future of banking, and keep up with rapidly changing regulations and customer demands across the globe.
About the author
Warren Aw is managing director for APAC at Epsilon.
Prior to his role at Epsilon, Warren headed Colt Technology Services’ enterprise, capital markets and service provider business in Singapore and Hong Kong.