In 2021, the banking sector is still recovering from the catastrophic consequences of the recent financial crises and global pandemic.
The new reality dictates the new rules, and all the banks are looking for new digital solutions to adapt. As Deloitte observers indicate, cloud computing appeared in the focus of IT leaders in banks these days as it assists in meeting changing customer expectations and developing alternative business models the best.
There are loud examples of partnerships between the banks and technology companies in developing cloud technologies already, Bank of America requested IBM Cloud Policy Framework for Financial Services and Banko Santander added Microsoft Azure to its hybrid cloud programme. You can join this club too!
These days, hybrid cloud computing will let your banking system adapt to the changing circumstances and benefits. As a mix of computing, storage, and services, it creates a digital environment that is flexible and secure enough to manage both sensitive and public information.
Depending on your needs and the particular data type, you can protect or scale your data and keep the pace and appearance of the existing workflows. Read more to get all the details on hybrid cloud technology!
What a Hybrid Cloud Is
In essence, the hybrid cloud is the technology that includes one public cloud (or several), a private cloud (as an on-premises data center), and the strong network connection between them in its architectural design. It’s helpful once you need to transfer data fast and secure in the dynamically changing business environment.
As a result, it’s possible to increase your computing capacities on the public cloud by not putting private information at risk. This is especially relevant when you store loads of private data and need to extend to a private cloud occasionally.
For example, the technology would be helpful for the university while announcing an annual admissions process.
The Key Differences between Public and Private Clouds
Two cloud components in the hybrid cloud have different characteristics, letting you benefit from both worlds.
The public cloud is the technology that relies on the third-party provider: some sort of virtual storage that hosts workloads and spreads information among multiple organizations.
In its turn, the private cloud is an on-premises data center. Usually, it's local storage that locks the information and protects it from anyone without the granted access.
The strongest part of the public cloud model is cutting operational costs by outsourcing them to the cheaper technology that handles the processes efficiently.
In its turn, the private cloud provides the space for compliance to strict regulatory standards and is generally more customizable and secure.
Hybrid cloud architecture connects these two worlds, and the technology possesses scalability and flexibility along with improved security and policy-driven deployment.
Distinct Characteristic of a Hybrid Cloud Model
- The common data management for private and public clouds
- Ability to connect workloads in on-premises data storages and existing traditional systems with the public domain
Thanks to the internal compatibility, public and private solutions significantly facilitate scaling and saving essential resources on other business aims.
In short, the technology enhances computing and storage power and contributes to the optimization of resources. In the future, when the sensitivity of the information changes, you can easily transfer it to another cloud type.
5 Main Hybrid Cloud Benefits
- Greater control over your private data. The biggest advantage of a hybrid cloud is its ability to protect sensitive information by not limiting the potential for scaling.
- Single control center. You can store public and private data in one place, which significantly facilitates managing. There’s no need to access each cloud separately.
- Smooth processing. Within a hybrid cloud, data circulates faster and doesn’t cause extra delays.
- Greater security. The technology's architectural design safeguards access to your private information by limiting its exposure to the public cloud.
- Expand when fast and necessary. The flexibility of the hybrid model allows cutting resources on expansion with a public cloud.
Main Use Cases of Hybrid Cloud
Many industries enjoy the benefits of hybrid cloud computing. Among them, there are healthcare, financial institutions, and the representatives of the insurance sector.
In general, the technology makes it easy to connect your business needs with appropriate IT technologies. Here are the use cases when it’s relevant to request hybrid cloud services:
- Introducing a new app. The technology helps test the new digital idea by not risking your privacy and not spending too many resources during the launch.
- Sticking to international regulations. A hybrid cloud makes it easier to stay compliant with GDPR by effectively managing your private and public data. This way, you can protect yourself from penalties.
- Fast computation. If your business requires fast yet safe expansion, hybrid cloud technology lets your workers keep managing their internal processes smoothly, even if the workload in the related digital space increases. No delays and problems will prevent you from the accelerated computation and steady business growth.
- Separating workloads. You can divide information between clouds: leave sensitive information in the private space and run the rest of the applications on the public cloud.
Hybrid Cloud Adoption in the Banking Sector
When it comes to banks, hybrid cloud computing reveals its best as the place to safely store sensitive financial information but still scale.
With this technology, your organization can effectively separate data loads and transfer the relevant part to a cheaper public cloud. The profit is self-evident: you’ll meet the industry requirements and still remain flexible when it comes to the less regulated workloads.
Main banking problems hybrid cloud technology deals with:
- Increase of payment transactions without a card.
- Shift to remote work.
- Digitalization of the bank branches.
- Need for online documentation.
In the list of hybrid cloud benefits, the financial sector will get the most from dividing information between private legacy systems and cost-effective and efficient public clouds.
By maintaining this balance, you can implement various innovations fast, including the solutions we listed as top banking industry trends in 2021.
How to Start Implementing Hybrid Cloud in the Banking Sector
In essence, the technology adoption is a forward-looking move, as you never know in advance which information will become sensitive tomorrow.
In addition, the solution assists in shifting from traditional systems to digital banking smoothly, fast, and cost-efficiently. At the same time, it’s important to consider numerous aspects in advance to benefit from the software implementation the most. Here’s the proposal on the successful hybrid cloud implementation:
- Revise your resources. Before you start, it’s important to clarify all the applications, information, and workloads you currently have. In addition, you should take into account the financial goals, including ROI, migration budget, and potential risks. Based on the data types and project tasks you’ve identified, you can pick the exact cloud transformation strategy that will work the best for you.
- Encrypt your private data. Take care of your sensitive information first: make sure it’s safely stored in your local data center, has a backup, and has all the protection needed.
- Work on software architecture. At this stage, you should involve a tech specialist who will revise the current IT architecture. Without proper preparation, the migration to the cloud will experience long delays, unexpected technical problems, and severe bugs.
- Calculate the costs. Take into account the ways your infrastructure can reduce the usage, the maximum information you can move to the public cloud, and the possible changes in the sizes of workloads you can make. You can consult your tech assistant on the possible automation tools, scaling mechanisms, and hosting opportunities. This way, you will increase the predictability and profitability of your digital project.
- Select the provider. Consider several options and investigate all the pros and cons of various technology providers to make the best choice for your particular case.
- Don’t rush. Let the migration go step-by-step, so you can control the process and include the necessary changes on the way.
- Check the connection. The network connection is critical for smooth hybrid cloud operation. That’s why it’s essential to test the synchronization between various storage types within the software.
- Introduce the next security layer. You should protect not only your private cloud but the hybrid cloud overall. For this, the DevOps approach reveals its best. While introducing the upper-level security, check isolation of individual workloads, Firewall configuration, the presence of necessary controls and multi-factor authentication, and anti-virus system. There can be other security measures, depending on the specifics of your project.
- Keep monitoring the software. As with any technological innovation, it’s important to check and update the software constantly to work as you wanted. For this, set the list of KPIs and keep in touch with the software company that made this tool.
Hybrid Cloud Implementation: Main Challenges
Since there are numerous stages on the way to building hybrid cloud solutions, it’s important to track the possible difficulties on the way. Here you can find the top 3 challenges you should be ready to face:
- Complex software architecture. Your success heavily depends on the ability to manage the software promptly. The technology itself is a sophisticated link of protocols and networks, and it’s important to get the provider who understands how to build it accurately. Ideally, the solution should have a single, easy-to-use interface where numerous sophisticated cloud processes work under the hood.
- Potential transfer problems. The role of proper connection and data handling is also tremendous. In particular, you need to ensure smooth and encrypted synchronization between two cloud types to make the technology truly work. Otherwise, you will experience latency problems and numerous bugs in the system.
- Technical knowledge required. After the development stage, you cannot avoid the need for internal training. Using the software requires specific technical skills. That’s why your provider should not only be an expert in making a working solution but also be able to explain to your workers how to use it.
Where to Get Hybrid Cloud Services
If you’re interested in introducing the hybrid cloud computing model to your system, you can refer to us! We’re Intellectsoft, the tech company assisting businesses on the way to digitalization and automation of their processes.
For the banking sector, we offer a wide list of financial software development services. One of these tools can be yours!
Talk to our experts if you need to get professionally made hybrid cloud software for your bank. We’ll be happy to assist, share our knowledge, and become your reliable tech partner on the way to building this complex and efficient tech solution!