Cloud Computing – Creating Business Opportunities in the Financial Services Sector

Financial services firms today face a fiercely competitive landscape. IT transformation is needed to effectively manage data, improve operational efficiencies, and enable IT to align to dynamic business requirements. NetApp’s Monty Zarrouk, Senior Solutions Marketing Manager, Financial Services for NetApp discusses how cloud computing is addressing these challenges and creating significant change in the financial services industry.

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Cloud is a hot topic across many industries but it has unique considerations for financial services organizations. Can you elaborate?

Monty Zarrouk: With advancements in technology and evolving operational models, IT in the financial services sector has the opportunity to modernize aging legacy infrastructures and move to a model that delivers cost-effective services that facilitate business.

The economic benefits of cloud computing for businesses in general today are marked and the operational drivers are substantial and well known. Cloud computing is not as disruptive as many organizations feared originally. As with most technologies, however, solutions to one problem often breed challenges that cause another problem.

For example, due to regulations and data security requirements, financial services firms need to maintain strict control of their data, wherever it resides. Therefore, implementing a cloud solution in the financial services world requires a way to safely extend the “digital walls” because regulation stipulates that data cannot leave the premises of the firm.

As a result, the private cloud is still more widely accepted than the public cloud among most financial institutions. Although the benefits of private and public clouds are similar, privacy remains the primary concern.

How will cloud services transform the financial services industry?

MZ: The top benefits expected by financial services firms from implementing a cloud strategy include improved IT efficiencies and managing assets, risk mitigation, the ability to generate new revenue streams, and enhancement opportunities for products and services.

Cloud usage models offer tremendous opportunity for financial services organizations to uncover cost savings, reduce capital expenditures, and provide transparency into how computing services are consumed across businesses.

Unfortunately, financial firms do not have the luxury of time. These organizations are under extreme pressure to capture, store, and manage the massive volume of data used to run the business. In addition, Capex constraints prevent investments needed to expand internal, on-premises data center facilities.

By moving to a cloud environment, financial services firms are positioned to benefit from the operational and cost efficiencies that can help optimize staff productivity; meet regulations for retention; and reduce error, fraud, and duplication. A cloud infrastructure makes it possible to standardize and simplify IT services and reign in costs.

Which cloud model is ideal for financial services organizations?

MZ: Deciding on which cloud model offers the best fit depends on the critical nature of the workload and how security and compliance requirements will be handled. Whether a cloud is public, private, or a hybrid, the key to success is creating an appropriate infrastructure in which all resources can be efficiently utilized and shared. And in a cloud environment, implementing the right data storage model becomes even more crucial to effectively support the requirements of a shared infrastructure model.

What solutions does NetApp offer for financial services?

MZ: Turning data into opportunity requires more than just managing bits – it means deep changes in how you connect that data to business. Financial services organizations want to manage data sustainably, identify unexpected new opportunities quickly, and keep most data for a long time – affordably. To do this effectively, financial services organizations must build an IT solution on the most flexible and open platform available, with a broad solution choice to scale over the long term.

NetApp’s portfolio of solutions provides a storage foundation for shared infrastructure with clustered Data ONTAP, the industry’s #1 storage OS, to ensure continuous data access and greater IT agility. NetApp’s portfolio includes flash arrays and high-performance storage systems for application-driven storage requiring ultra-high performance, high reliability, and proven price/performance.

NetApp’s storage solutions enable:

  • Customer-centric banking, more effective cross-selling, and nonstop banking operations.  
  • Real-time risk assessment, reporting, and big-data analytics while maintaining compliance.  
  • Better predictive models for more effective operations with low latency analytics. 

More than 9,000 financial services firms worldwide rely on NetApp® solutions.

How are financial services organizations using NetApp solutions to enable its cloud infrastructures?

MZ: Financial services organizations often do not get enough credit for some of the innovations they achieve with IT due to some of the strict regulations and customer challenges they face. For example, imagine what you would do if you did not have instant access to your money.

One compelling example is Suncorp, a global US$15B revenue company. Suncorp set a goal that it did not want to measure itself against other insurers or other banks. Suncorp used a private cloud built on the Cisco® and NetApp FlexPod® infrastructure to develop and deliver product and service applications more quickly and respond to customer demands quickly, and as a result it set people’s expectations higher. In fact, Suncorp spent 30% less on IT and sped up innovation everywhere.