Cloud Computing Strategic considerations for Banking & Financial Services Institutions

Cloud Computing Strategic considerations for Banking & Financial Services Institutions

Cloud computing is the convergence of virtualization, distributed applications, grid, maturity of enterprise software applications and enterprise IT management - to enable a dynamic, flexible and economic approach for deploying and scaling enterprise IT. Cloud computing is tremendously attractive as it enables a fundamental shift from capital intensive
focus to a flexible operational management model. It is typically characterized by on-demand computing paradigm based on pay per use pricing model. Cloud computing delivery models can be distinguished based on the level of abstractions they export to the Cloud users and the level of computing resource management they offer. It is scalable, flexible and provides an
automated system deployment model.

Banking & Financial Service Institutions are possibly the most advanced in terms of technology adoption and use it as a key differentiator. With high levels of business process automation, maturity in the functional portfolio, straight through processing and proven technology outsourcing benefits, BFS institutions stand to benefit significantly from Cloud computing capabilities. Additionally, with complex Compliance and Regulatory policies, combined with expansive products and geography coverage, the business impact is even greater. While the benefits are exponential, there are also significant challenges in adopting this model – including Legal, Security, Performance, Reliability, Transformation complexity, Operating control & Governance and most importantly proof for the promised cost benefits.

The IT industry forecasts exponential investments in Cloud Computing, which is matched by industry trends even as they prepare for growth. Key to this evolution being successful is the measure of abstraction that can be achieved encompassing the service functionality, delivery of the service and the governance mechanism covering the service delivery.

Our assessment indicates that there is no single cloud solution model that can meet all the requirements, but a federated service ecosystem which combines both cloud and non cloud based solutions. A federated ecosystem offers multiple archetype implementations, del ivers flexibi l ity to match business requirements and provides an incremental adoption path, thus enabling external business service providers to seamlessly integrate into this ecosystem. We also anticipate that as BFS institutions start realizing the benefits of Cloud computing, the internal business & technology operations will transform into a coherent set of on-demand, scalable & flexible platforms covering five key dimensions - Technology development, Customer functions covering channels & integration, Core Business Services & Product Engines, Business Enabling Services and Corporate Services covering Finance, HR, Legal & Marketing.

TCS believes that Cloud Computing will prove very attractive to Financial Institutions, primarily because it provides the next generation value in IT with innovative and flexible business models. While this model may prove to be potentially disruptive, BFS enterprises are rapidly getting ready to embrace this change.

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