Financial services: A sector undergoing a hybrid cloud revolution

In the fast-moving world of financial services, technological changes are usually afoot and 2021 is proving to be no different. One of the latest trends driving change within the sector is the increasing number of firms moving to a hybrid cloud infrastructure, a cloud solution that mixes elements of both public and private cloud.

According to a recent report from Nutanix, financial services firms widely expect that, over the next five years, hybrid cloud will be the only IT model that delivers positive growth. In that time, take-up of hybrid cloud solutions among financial services firms is expected to increase 39 per cent.

The key driver of this move to hybrid cloud is an increased realisation of the benefits offered by both public and private cloud and a desire to unite these in one infrastructure.

Financial services firms that have previously opted for a public cloud provider, in particular, are looking to the enhanced security offered by private cloud. The Nutanix report found that 43 per cent of financial services firms were planning some form of extra private cloud investment during 2021.

So, what is it that is drawing financial services companies to hybrid cloud models? Briefly, a hybrid model offers both the flexibility of the public cloud and the tightened security of private cloud. Crucially, a dynamic, hybrid cloud solution is better suited to the more remote, mobile world that is emerging in the wake of COVID-19.

Scalability

Crucially, hybrid cloud enables banks and other financial services firms to scale up or down as they need. Meaning that they can meet peaks in demand when large numbers of customers are logging in, while at the same time ensuring they are not overpaying for excess capacity that they usually won’t be using.

Security

With a hybrid cloud solution, financial services firms can gain the first-class security of a private cloud infrastructure, without sacrificing the scalability, cost-efficiency and flexibility of a public cloud provider.

With ever more emphasis being placed on the security and privacy of customer data in the wake of legislation like GDPR, utilising private cloud security features in a dynamic hybrid model helps firms keep their customer data as safe as possible.

Furthermore, with more financial services employees working from home than ever as a result of COVID-19, a tailored hybrid solution with a sophisticated security system can help guard against the increased security threats that arise from homeworking, such as the vulnerability of home wi-fi networks and increased susceptibility to things such as phishing scams.

Cost-savings

As mentioned, earlier, a hybrid solution ensures that financial services firms aren’t overpaying for excess capacity and can scale as needed. However, that isn’t the only cost saving that a hybrid infrastructure can deliver.

With a fully private solution, firms must invest a serious amount of time and money in developing the kind of scalable, software-defined infrastructure that a private cloud solution requires.

By largely focusing on just the security side of the private cloud, a hybrid cloud solution drastically reduces the time spent building the infrastructure, which, as a result, leads to drastically reduced costs.

Innovation and responsiveness

With a hybrid cloud solution, financial services firms are less tethered to one location. This gives employees at offices around the world the freedom to work together in a collaborative, safe cloud environment, which facilitates and speeds up innovation.

This kind of flexibility also means that a company is more responsive to changes and advances that occur elsewhere in the industry. Financial services is a sector of upheaval in so many ways: in regulation; in digital disruption; and in customer demands. A dynamic, hybrid cloud infrastructure means that companies can respond to changes from all angles quickly and efficiently.

Hybrid cloud is a revolution that is sweeping the financial services sector. According to the Nutanix report, around half of financial services firms have partial or full deployment of a hybrid cloud infrastructure, while a further four in ten plan to deploy hybrid cloud in the next two years.

Given the kinds of challenges financial services firms are facing these days, whether that’s COVID-19, GDPR or digital disruption, it’s easy to see why so many are turning to the flexibility, responsiveness and cost-efficiency that a hybrid cloud infrastructure can deliver.