Financial Services’ Hybrid Cloud Imperatives
Financial services institutions (FSIs) pursue cloud deployment to satisfy customer expectations for a full-service remote experience and to remain competitive. This sounds straightforward, but FSIs have particular requirements related to risk, cost, compliance and resilience. A hybrid model with the right mix of colocation and cloud is ideal.
Colocation allows you to move critical infrastructure like trading platforms, banking applications and customer service operations into high-performance data center facilities – which provide the low latency, scalability, reliability and favorable total cost of ownership (TCO) you require. And, you also need to be able to connect to the major cloud service providers (CSPs) via dedicated, private interconnection within the facility to maximize the value of a hybrid model.
According to IDG’s 2021 State of the Data Center report, “Cloud repatriation has been a growing trend in recent years. Many companies that have uncritically embraced cloud-first strategies have seen costs increase, performance drop, or compliance being challenged and are now moving workloads and data off a public cloud environment to a different infrastructure.”¹ That’s not to say they are abandoning the cloud. Instead, FSIs and their ecosystem of service providers are methodically evaluating each element in their set of resources. By establishing a business-specific balance of colocation, on-premises and public cloud services, they can take back control of costs and offer an optimized, differentiating customer experience.
I agree with this approach to fine-tuning your strategy and roadmap. In my opinion, when you bring these types of ideas into your conversations, you also need to think about the role of a colocation and interconnection provider. The right provider adds value in several ways. For example:
- Interoperability and future-proofing cloud operations ─ Verify the number of CSP options. This is important because CSP offerings vary by region. Be sure the provider connects directly to CSPs using a “native onramp” (interconnection in the same facility). Colocation providers without a native onramp route your traffic via a carrier, software-defined network provider or the internet to a facility with an onramp. This increases risk, latency and the potential for performance issues. Also, direct connectivity helps reduce bandwidth costs.
- Uptime and reliability ─ Settle only for a 100% uptime service level agreement (SLA) and the track record to prove it.
- Flexibility ─ Solve your specific compliance issues through a curated approach to legal and contractual terms versus a rigid “corporate” approach. Be able to design your space your way to fit your technical perspective.
- Physical security ─ Check that 24x7 security is provided by qualified professionals and confirm the use of multiple solutions, such as biometrics, cameras, sensing gates and guards. Also, should your staff need to enter the facility, consider access procedures.
- Redundancy and resiliency ─ Validate disaster recovery capabilities and how they can be implemented to meet your requirements.
To learn how CoreSite helps FSIs optimize their cloud mix to address industry imperatives and remain competitive, click here.
To take a really deep dive into the challenges and solutions, check out "Low Latency, High Security, Flexibility: How Financial Services Can Get More from Hybrid IT." In this webinar, co-hosted by 451 Research and CoreSite, featuring Mike Katsiadas, head of IT business operations at IMC Trading, we:
- Learn how financial firms' security and networking needs have evolved in the hybrid IT era
- Hear from a financial services IT professional about how technology can solve business issues
- Explore options for addressing the digital transformation challenges specific to the financial sector