The changing world of cloud solutions
01 July 2020
In a rapidly changing marketplace, FIS’ Martin Foster, head of cloud deployment, takes a look at how cloud solution providers help organisations become more business-focused while still maintaining a technological innovation lead
Image: Marko Aliaksandr/shutterstock.com
Taking a step back in time, the collateral and securities finance marketplace was very different three years ago with respect to the adoption of cloud solutions. The key drivers to move the business to a cloud-based model mainly resided with smaller organisations, typically grounded on cost, resource limitations, internal blockers, and demand for quicker time to market. Today, the marketplace could not be more different as the pandemic has highlighted specific challenges on internal infrastructure. Trading volume and margin call spikes, thinner margins, cyber-risks and infrastructure demands of working from home and the constraints of legacy technology are driving organisations large and small to move more and more to the cloud.
To illustrate the scale of the challenge, in March 2020, FIS’ clients experienced a three-fold increase in trading volumes on our systems and a 2.5-times spike in post-trade processing. In speaking with our clients during this time, we heard consistently that budgets and discretionary spending were constrained, and they expressed an accelerated need for managed services and cloud offerings. Their focus is on cost and resilience and less on the tools of IT and infrastructure delivery.
While many are just beginning to see the seeds of change, the pace of cloud adoption is increasing and will continue to do so at an accelerating rate for the foreseeable future. The financial industry has become too reliant on complex technologies and bespoke processes to meet current demands, so the future policy is not just for new solutions and opportunities, it’s the migration of legacy solutions and a new way of thinking across the board. Now is the time to start embracing these changes, stepping forward into the future, and reaping the benefits.
In the past, interest was low and for those where an engagement was established, often significant roadblocks were faced, some insurmountable. Over the past months, the direction has completely changed with the majority of engagements being wholly directed towards the adoption of cloud solutions or forming a solid option for discussion. Today, most new engagements demand the option for cloud deployment, demonstrating clearly that the market’s mindset has changed. At FIS, we have seen a considerable uptick for our Apex Collateral Cloud deployment requests over the last few quarters not only from new prospects evaluating solutions but also from existing clients looking to migrate from an on-site installation as the benefits become more compelling.
Historically, some of the biggest challenges to senior management lay with security and today’s unpredictable economic and regulatory landscape. It is often seen as easier to keep the status quo with on-premises solutions where in-house teams could provide the necessary IT infrastructure and support. However, the growing quantity of bespoke solutions and the pace of technological change means that capacity and costs are increasingly out of balance with business benefits. It’s time to ask yourself if these limits have been reached.
What’s changed with cloud solution providers
It is clear that the cloud solution provider (CSP) has a key focus on the security of customer information and data, from guarding them against cyberattacks to maintaining data isolation and stringent access controls. Organisations are adopting a more ‘security-first’ thinking, which is highlighted by the FIS slogan of ‘defence in depth’ when referring to cloud solutions. It takes a certain focus from the CSP to innovate, foresee risks and trends, and react to the changing global demands. Customers need to feel confident in the supply of secure services, have trust in the CSP’s ability to be a market leader and cope with unforeseen events such as the financial crisis and COVID-19. Often, this can be found with larger CSPs that utilise a large pool of experience from many customers and have resources to invest in technology.
The cloud has seen considerable growth in many sectors, increasingly being used to outsource platforms and build new solutions. This in itself is not a means to an end; it is just one part of the overall picture. The primary focus should remain on security alongside the ability to reduce financial, time, and human costs. CSP should view the cloud as a tool, but the key to their success is the ability to provide security and effective governance on top of the base services.
As a CSP in the financial space, FIS has security at the core of its organisation, allowing it to not only provide its own cloud offering, the FIS Cloud, but to be agnostic to other providers, taking their offerings and wrapping security, governance, regulatory compliance, and rigorous auditing together to form a market-leading solution.
Trending technology
The world is witnessing a paradigm shift in technological trends and it’s redefining the way business is done. Business models are facing extreme pressures from regulatory, security, and other market forces, necessitating an increased focus on operational efficiency and effectiveness. Transitioning to a CSP removes the burden of an organisation’s IT infrastructure and human resources – allowing the business to focus on its core competencies.
There is also increased pressure to innovate while keeping pace with technological advancements. The CSP needs to embrace technology to solve current problems, but it also should look to providing enhanced solutions for the future to save costs, speed up delivery, and provide additional business services.
Emphasising the focus on data isolation where a single-tenanted solution is preferred by the customer, the use of containerisation application platforms such as OpenShift can unite multiple customer operations onto a common platform to build, deploy and manage applications consistently. Commonality is a key factor to a lower-cost solution and the path to a more stable, supportable solution providing obvious customer benefits as well.
Innovations in continuous integration (CI) and continuous delivery (CD) allow for quicker deployments where changes and new application features follow a fully automated path, essentially putting updates into production on demand. CI/CD allows the application developer to become more productive, ensuring a focus on code quality and security. Technological advances and regulatory compliance changes can be quickly integrated into a common platform – saying good-bye to long waits for new versions and upgrades.
The future
Financial customers will continue to demand more of their CSPs. The best providers will be rewarded for infusing their offerings with high-value services that cover more than IT and basic support. Long-term strategy for success must include a focus on purpose-built offerings that help grow client business, solve strategic business problems and provide a future direction in areas such as cloud, big data analytics, blockchain, and artificial intelligence.
FIS is well placed to drive this change not only with its cloud computing capabilities but also as an application services provider that couples secure hosting services with the development of specialised applications and services. This approach can leverage the advances of containerisation and CI/CD along with tightly coupling services to third-party solutions, such as direct links to clearing houses or brokers where connectivity components can be mutualised, reducing start-up costs and ongoing maintenance.
Key takeaway
Not all providers are created equal or can help you address the changing marketplace. Some simply don’t understand the technological obstacles being faced, others do not have the needed resources. Reputation counts for a lot in today’s world, it is built up over many years of proven results and with confidence to maintain a lead against an uncertain future. Think about your organisation’s key strengths and business focus when you are ready to embrace the future and find a CSP that is a partner for tomorrow.
To illustrate the scale of the challenge, in March 2020, FIS’ clients experienced a three-fold increase in trading volumes on our systems and a 2.5-times spike in post-trade processing. In speaking with our clients during this time, we heard consistently that budgets and discretionary spending were constrained, and they expressed an accelerated need for managed services and cloud offerings. Their focus is on cost and resilience and less on the tools of IT and infrastructure delivery.
While many are just beginning to see the seeds of change, the pace of cloud adoption is increasing and will continue to do so at an accelerating rate for the foreseeable future. The financial industry has become too reliant on complex technologies and bespoke processes to meet current demands, so the future policy is not just for new solutions and opportunities, it’s the migration of legacy solutions and a new way of thinking across the board. Now is the time to start embracing these changes, stepping forward into the future, and reaping the benefits.
In the past, interest was low and for those where an engagement was established, often significant roadblocks were faced, some insurmountable. Over the past months, the direction has completely changed with the majority of engagements being wholly directed towards the adoption of cloud solutions or forming a solid option for discussion. Today, most new engagements demand the option for cloud deployment, demonstrating clearly that the market’s mindset has changed. At FIS, we have seen a considerable uptick for our Apex Collateral Cloud deployment requests over the last few quarters not only from new prospects evaluating solutions but also from existing clients looking to migrate from an on-site installation as the benefits become more compelling.
Historically, some of the biggest challenges to senior management lay with security and today’s unpredictable economic and regulatory landscape. It is often seen as easier to keep the status quo with on-premises solutions where in-house teams could provide the necessary IT infrastructure and support. However, the growing quantity of bespoke solutions and the pace of technological change means that capacity and costs are increasingly out of balance with business benefits. It’s time to ask yourself if these limits have been reached.
What’s changed with cloud solution providers
It is clear that the cloud solution provider (CSP) has a key focus on the security of customer information and data, from guarding them against cyberattacks to maintaining data isolation and stringent access controls. Organisations are adopting a more ‘security-first’ thinking, which is highlighted by the FIS slogan of ‘defence in depth’ when referring to cloud solutions. It takes a certain focus from the CSP to innovate, foresee risks and trends, and react to the changing global demands. Customers need to feel confident in the supply of secure services, have trust in the CSP’s ability to be a market leader and cope with unforeseen events such as the financial crisis and COVID-19. Often, this can be found with larger CSPs that utilise a large pool of experience from many customers and have resources to invest in technology.
The cloud has seen considerable growth in many sectors, increasingly being used to outsource platforms and build new solutions. This in itself is not a means to an end; it is just one part of the overall picture. The primary focus should remain on security alongside the ability to reduce financial, time, and human costs. CSP should view the cloud as a tool, but the key to their success is the ability to provide security and effective governance on top of the base services.
As a CSP in the financial space, FIS has security at the core of its organisation, allowing it to not only provide its own cloud offering, the FIS Cloud, but to be agnostic to other providers, taking their offerings and wrapping security, governance, regulatory compliance, and rigorous auditing together to form a market-leading solution.
Trending technology
The world is witnessing a paradigm shift in technological trends and it’s redefining the way business is done. Business models are facing extreme pressures from regulatory, security, and other market forces, necessitating an increased focus on operational efficiency and effectiveness. Transitioning to a CSP removes the burden of an organisation’s IT infrastructure and human resources – allowing the business to focus on its core competencies.
There is also increased pressure to innovate while keeping pace with technological advancements. The CSP needs to embrace technology to solve current problems, but it also should look to providing enhanced solutions for the future to save costs, speed up delivery, and provide additional business services.
Emphasising the focus on data isolation where a single-tenanted solution is preferred by the customer, the use of containerisation application platforms such as OpenShift can unite multiple customer operations onto a common platform to build, deploy and manage applications consistently. Commonality is a key factor to a lower-cost solution and the path to a more stable, supportable solution providing obvious customer benefits as well.
Innovations in continuous integration (CI) and continuous delivery (CD) allow for quicker deployments where changes and new application features follow a fully automated path, essentially putting updates into production on demand. CI/CD allows the application developer to become more productive, ensuring a focus on code quality and security. Technological advances and regulatory compliance changes can be quickly integrated into a common platform – saying good-bye to long waits for new versions and upgrades.
The future
Financial customers will continue to demand more of their CSPs. The best providers will be rewarded for infusing their offerings with high-value services that cover more than IT and basic support. Long-term strategy for success must include a focus on purpose-built offerings that help grow client business, solve strategic business problems and provide a future direction in areas such as cloud, big data analytics, blockchain, and artificial intelligence.
FIS is well placed to drive this change not only with its cloud computing capabilities but also as an application services provider that couples secure hosting services with the development of specialised applications and services. This approach can leverage the advances of containerisation and CI/CD along with tightly coupling services to third-party solutions, such as direct links to clearing houses or brokers where connectivity components can be mutualised, reducing start-up costs and ongoing maintenance.
Key takeaway
Not all providers are created equal or can help you address the changing marketplace. Some simply don’t understand the technological obstacles being faced, others do not have the needed resources. Reputation counts for a lot in today’s world, it is built up over many years of proven results and with confidence to maintain a lead against an uncertain future. Think about your organisation’s key strengths and business focus when you are ready to embrace the future and find a CSP that is a partner for tomorrow.
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