Why do banks need to move to the cloud? The answer is simple: they are lagging behind. Looking at cloud adoptions, banks rank in the lower midfield according to a study by KPMG and Bitkom. While the cloud is firmly established in 70 to 90 percent of the German energy, transport, logistics, automotive and mechanical engineering companies, only 59 percent of banks are using the benefits of a cloud environment.
From ‘no-go’ to ‘cannot do without’
Nevertheless, there is a paradigm shift from ‘an absolute no-go’, to ‘obviously cannot do without it’. After all, more and more banks deliberately deploy or plan to deploy cloud-based solutions. This may be a response to the Fintech start-ups challenging traditional banking with innovative apps and cloud services. However, it is just as true that mobile banking, as it has been offered by all major banking institutions for years, has become simply unthinkable without cloud computing. In addition, the increasing price sensitivity of the customers and their growing readiness to change their bank, and the persistently low interest rates intensify competition and cost pressures.
The perfect match: cloud and DevOps
The days are over when a clear, “no”, to the cloud was considered a general industry rule in banking. Their application scenarios with infrastructure, platform, software and analytics-as-a-service, are much too diverse for a simple “no”. On top of that comes the increasing adoption of DevOps in the cloud, which has in part revolutionized software development. Since banks have always – not just in the era of GDPR – had the obligation to meet very high data security requirements, their tendency to operate critical data and applications either on premises or in a hosted private cloud environment is well founded. On the other hand, public clouds – with their flexible provision of IT resources – are ideally suited to support fast and efficient development processes.
Always on: dynamics and cost advantages
Whenever there is a certain dynamic – be it in the DevOps area or by switching applications on and off – the cloud can certainly offer significant cost advantages. Nevertheless, it is also important to clear up an important prejudice here. So-called "always-on" applications, which operate around the clock, do not automatically generate significant cost advantages when deployed as public cloud solutions as opposed to well-organized operations in on–premises or private cloud environments. There is no rational reason for that.
Beginning of a new era: multi-clouds
But in 2018, the cloud world can no longer be divided into private, public or hybrid alone. The trend is taking a big step beyond this, towards multi-cloud environments. Here, cloud solutions from various providers connect not only with each other, but also with on-premises and private cloud solutions. It can, for example, be beneficial for banks to deploy multiple cloud environments running separate systems for different applications, self-service terminals, or services.