This post can be considered a postscript to my previous post – What defines a Smart CBS?, where we explored – how legacy core-banking architectures have long been inhibiting their agility and rending them unsuitable for innovations. The exponential growth in the volume of computing devices and digital data (ushered in by the Internet economy) is placing new demands and burdens on the traditional data centers – in terms of being able to collect, manage and interpret this information. Traditional information infrastructures are not equipped to deal with the volume, variety or velocity of this information, let alone harnessing the data to gain meaningful business insights!
For carriers to create a strong case for Business Intelligence or Internet of Things (IoT), bulky legacy infrastructures need to be jettisoned.
In this quest, one of the most powerful technology adoptions would be – Migration to Cloud-based technology platforms. By amalgamating the new advances in cloud technology with emerging best practices in legacy decommissioning, banks can shrink their costs and create avenues for Digital re-imagination.
In simplest terms, Cloud computing refers to a framework that enables delivery of servers, storage and applications to users through the Internet. It proposes usage of shared resources rather than having localized servers or disparate devices to handle the application.
Here, “Cloud” is a metaphor for the Internet. For business applications to be considered “Cloud Based”, it’s data and programs need to be accessed via the Internet, or at least have that data synced with other information over the Web. Cloud models could offer a multitude of benefits to transform legacy business applications, significant ones being:
a. Lowered Costs: Moving data centers to cloud can help in eliminating huge fixed investments that go in the upkeep of extensive physical infrastructure. These investments could be better directed towards cloud servers, which bill users on pay-as-you-go basis.
b. Centralized data: Certain industries (more notably the financial institutions) have lately witnessed tremendous amounts of M&As that have resulted in fragmented data systems (and subsequently increased inefficiency). Cloud servers can help facilitate effective data center consolidation with a superlative degree of secure computing.
c. Development Agility: With on-demand availability, cloud computing brings with it a string of benefits. Virtualization ensures that the banking application can be accessed from any geography, at any time. This makes the organization more flexible, more responsive and more productive.
d. Boost in innovation potential: After adopting cloud, financial institutions would no more need to worry about managing unconventional integrations to legacy systems. They could re-focus their resources on getting meaningful insights from the data, devising organizational strategies and growing the business.
e. Business Continuity: For an industry that is daunted by burgeoning volumes of data, any loss of data could be detrimental. To safeguard it, cloud backups and recovery systems could be considered. Cloud backups could help bolster an organization’s data protection strategy, without increasing workload on the IT staff.
f. Energy Efficiency: Last but not the least, a virtual environment could help attenuate the overall energy consumption and carbon footprint that accompanies a physical set-up. It could also encourage efficient utilization of computing power and spell less idle time.
Cloud is poised to transform the retail banking industry and enable them to compete on a level playing field with the industry’s leading innovators. Cloud computing, when clubbed with Big data or IoT – can prove to be a winning combination in bringing about digitalization. It truly has the potential to uplift a traditional business and get it to cloud nine!