Empowering data analytics with a multi-cloud architecture for banks
The impact of a powerful cloud combination
In the U.S., the Financial Industry Regulatory Authority (FINRA) advises businesses to be capable of switching cloud providers, assess the risks of vendor lock-in, and determine the suitability of multi-cloud solutions for specific business requirements. This proactive approach is driven by banks’ need to improve operational efficiency, adapt to rapid market changes, uphold stringent compliance standards, and enhance customer experience. Amidst these complexities, the adoption of a multi-cloud data infrastructure has emerged as a beacon of hope for the banking sector. By leveraging a multi-cloud strategy, banks can position themselves for a future characterized by resilience and adaptability. A recent study by IDC predicts that by 2025, 25% of tier 1 banks worldwide will deploy their data warehouses and analytics operations in the cloud.
Data infrastructure has become the bedrock upon which every strategic decision rests. It enables banks to gain real-time insights into customer behavior, manage risk precisely, and comply rigorously with regulatory demands. Today, a bank’s data infrastructure, scalability, and security are no longer mere advantages but prerequisites for maintaining a competitive edge.
The 2023 S&P Global multi-cloud survey reveals that 97% of organizations employ multiple cloud providers, primarily driven by cost optimization, data residency, and enhanced business agility.
What traditional cloud challenges can multi-cloud models overcome?
Multi-cloud strategy is a game-changing approach to data infrastructure that redefines how banks operate.
This approach empowers banks to leverage the unique capabilities of different cloud providers while mitigating risks associated with vendor lock-in and ensuring high availability. A well-executed multi-cloud strategy offers banks a strategic advantage, enhancing their agility, resilience, and ability to innovate. By seamlessly integrating multiple cloud providers into their data infrastructure, banks can optimize costs and improve performance. A multi-cloud strategy can address several data and technology challenges faced by banks.
Each major cloud provider brings their unique strengths to the table in facilitating data and analytics solutions. Selecting the right combination of services from the right providers can be the cornerstone of building a highly effective multi-cloud data infrastructure.
Benefits of a multi-cloud strategy
By strategically blending the strengths of different cloud platforms banks can achieve superior performance, cost-efficiency, and resilience. This approach ensures that every facet of the organization benefits from the unique capabilities offered by diverse cloud providers.
- Risk mitigation with multi-cloud
With cyber threats and data breaches on the rise, relying on a single cloud provider can be risky. A multi-cloud architecture provides built-in risk mitigation capabilities by distributing data and services across multiple platforms. In doing so, it helps banks safeguard against potential outages or vulnerabilities associated with a single cloud provider. Additionally, they can take advantage of each provider’s security features, ensuring robust data protection and regulatory compliance.
If a bank experiences downtime with one cloud provider, it can seamlessly switch to another provider’s resources to maintain critical operations. This redundancy minimizes the impact of service disruptions, ensuring continuous access to financial services for customers. - Optimizing workloads with different clouds
Banks can choose the most suitable cloud provider for each workload, considering factors such as performance, cost, and scalability. A bank can leverage Google Cloud Platform (GCP) for marketing analytics due to its powerful data processing capabilities and machine learning tools. Meanwhile, they can use AWS for core banking services, taking advantage of its extensive network infrastructure and compliance certifications. - Interoperability and data federation
Multi-cloud architecture allows banks to seamlessly exchange data across different cloud platforms for data sharing and collaboration while avoiding vendor lock-in. For instance, banks can use multi-cloud data federation to enhance their customer insights. They can federate data between AWS, GCP, and Azure to access the unique analytics capabilities of each platform, resulting in more comprehensive customer profiles and personalized services. - Tailoring cloud choices to regional preferences
Banks often operate in diverse regions, each with its cloud preferences. A multi-cloud approach allows them to tailor cloud choices to regional preferences, ensuring that local teams can work with the platforms they are most comfortable with.
A multinational bank operating in a country with stringent data privacy and compliance regulations can choose the most prevalent service provider in that location. It will help the bank meet local requirements and gain the trust of regional customers. Meanwhile, the bank can continue to utilize other service providers in different regions, ensuring a seamless and region-specific approach to cloud services while maintaining centralized control over their global operations.
Understanding multi-cloud approaches for banking
By strategically distributing workloads and data across diverse cloud environments, banks can mitigate risks, optimize costs, and stay agile. Various scenarios emerge in a multi-cloud strategy, each with its unique benefits and considerations. In this section, we explore the diverse tactics for optimizing cloud resources and enhancing organizational capabilities:
Conclusion
The adoption of a multi-cloud strategy has ushered in a new era of possibilities for banks seeking to future-proof their data infrastructure. With agility, efficiency, security, and compliance at the forefront of banking operations, a well-executed multi-cloud approach has become the key to unlocking these advantages. As we have explored throughout this blog, the significance of making informed decisions about service providers cannot be overstated. Each major cloud provider brings its unique strengths to the table, and selecting the right combination of services is the cornerstone of building a highly effective multi-cloud data infrastructure.
About the Author
Gunasekaran S is the Director of Data Engineering at Sigmoid and with over 20 years of experience in consulting, system integration, and big data technologies. As an advisor to customers on data strategy, he helps in the design and implementation of modern data platforms for enterprises in the Retail, CPG, BFSI, and Travel domains to drive them towards becoming a data-centric organization.
