10 December 2019
ATTITUDES TO TECH: EMBRACING THE CLOUD
In this blog, we explore customer perceptions around technology today. Find out how - and why - people are talking about cloud, and the key steps to implement it within your business.
Alec Doran joined Capco in September 2019, having previously worked on cloud projects in the UK public sector. In this blog, Alec shares what he learned from those experiences, and how financial services firms can implement cloud successfully.
Cloud adoption is growing. In Europe, more than half of enterprises are using cloud, but UK companies, and particularly those in financial services (FS), have been slow to embrace it. However, it’s not too late for firms to catch up. They can even reap some benefits from coming late to the party.
The benefits of cloud are well-documented, especially in terms of its cost benefits and scalability. Indeed, it’s been estimated that cloud data centers will process 94 percent of workloads by 2021.
So, why the delay?
Change has always made people nervous, and the cloud has been no different. When cloud computing entered wider public consciousness in the late 2000s and 2010s, firms were in the midst of the financial crisis, with public trust in these institutions at an all-time low.
Meanwhile, over the past ten years, gigantic data breaches, although not cloud-related, befell the likes of Yahoo, Sony, Equifax and more, affecting millions of users at a time. It seemed like everyone’s data may have been susceptible to a security breach.
The UK regulators were justifiably cautious and slow to give the go-ahead to banks wishing to move to the cloud. The Financial Conduct Authority (FCA) previously admitted their ‘uncertainty’ around cloud rules may have acted as a ‘barrier’ to firms using the cloud. This stance has changed significantly, of course.
A cultural shift
In January of this year the FCA updated its guidelines on cloud outsourcing, to ease firms’ compliance. After all, they’ve migrated to cloud too.
When we recently looked into what people were saying about cloud on social media using an online listening tool, the results showed that the number of mentions with a positive sentiment are significantly higher than negative ones.
Learning from trailblazers
We know from our work with clients and partnerships with all key cloud service providers that a lot of UK banks will start their journey to the cloud in 2020. January already saw a flurry of cloud announcements. Indeed, the Bank of England published a tender for a cloud partner; Lloyds Banking Group shared news of its strategic partnership with Microsoft Azure; and TSB announced a move to IBM’s hybrid cloud infrastructure.
Banks can use the knowledge and expertise gained from many other sectors that have already migrated infrastructure and key services to cloud. For example, the advantages gained from cloud in the neobanking space are well-known, but there are closer worlds to draw from.
From working on cloud implementations for the public sector, which incidentally adopted a ‘Cloud First’ policy all the way back in 2013, I know FS will face some similar challenges.
Both sectors are cautious and complex in terms of regulatory requirements and their tendency for legacy infrastructure; and both also hold highly confidential data which makes security an especially valid concern. While this makes such large-scale cloud transformation projects especially difficult, a successful implementation could open huge benefits to banks.
Here are my eight top tips for banks looking to implement cloud:
1. Make sure you truly understand the current landscape from the get-go.
Identify a migration approach for applications and look for potential areas of commonality before starting. This will allow the team to develop and migrate at a faster pace through common patterns and shared services, etc.
2. Keep the customer at the heart of everything.
The cloud function should be a customer driven area, based on demand. Make sure this is reflected in the products you build.
3. Develop common, re-usable shared services that provide consistent foundations across your organization.
This is critical in ensuring the organization can fully maximize the benefits cloud provides and allows the application team to focus on innovating to deliver added value to the customer rather than focusing on purely maintaining their application’s infrastructure.
4. Ensure security and cost optimization is embedded in the build process.
Too often, in cloud projects this is just an afterthought.
5. A cloud operating model is pivotal in ensuring that the new technology can be managed in-house.
And, fully utilizing the flexibility and cost savings offered by cloud technology.
6. Engaging, upskilling and bringing the support functions along the cloud journey is a key part of successful adoption.
The new technology may fundamentally change their day to day roles and ensuring they understand how and know what they can do to fully use the new capabilities available, will be the difference in teams being enablers or blockers to cloud adoption.
7. Understanding and being able to set up and manage a hybrid cloud landscape, gives organizations additional flexibility when moving away from third-party managed data centers.
This could provide a stepping stone when migrating to cloud, ensuring firms have time to make the correct, strategic decisions for their business.
8. It’s not too late for your firm - benefit from second mover advantage!
Cloud tech has evolved significantly over the last few years and Google and Microsoft have laid the foundations to really challenge AWS in FS. Firms have more confidence and flexibility in the provider they choose today and can leverage the wide variety of services and experience offered by the different cloud service providers.
The majority of financial services clients are still in the early stages of cloud adoption. Rather than the onerous simply being on playing catchup, we at Capco view the year ahead as an exciting opportunity to shape the development of cloud adoption with clients, by sharing best practices and lessons learnt from previous projects. Over the coming months we’ll be doing just that on capco.com.
For more information about working with Capco on cloud projects, please contact Alec at Alec.Doran@capco.com.