When you sit down and talk cloud with IT and business executives at financial services companies, the conversation shifts between public clouds and security concerns to more flexible, on-demand computing resources and new revenue opportunities, and beyond. For the most part, financial services institutions are still new users of cloud computing, and many are still developing their cloud strategies—but those leading the way are quite knowledgeable about the risks and rewards.
That’s exactly how the executives were that participated in a panel earlier this month at The Trading Show Chicago 2015 (Red Hat was one of the show sponsors). I moderated the panel, and the financial services executives talked about their companies’ cloud experiences and how they were hoping to maximize investments in cloud technologies. The panel included David Rukshin, CTO of WorldQuant, Tim Hundt, senior enterprise architect of GE Capital, and Adam Honore, CEO of MarketsTech.
For some perspective about just where the financial services industry is with regards to cloud computing, there’s a new survey out from the Cloud Security Alliance, “How Cloud is Being Used in the Financial Sector: Survey Report March 2015” that has some interesting stats. For example, the survey found that 61 percent of financial institutions are developing a cloud strategy within their organization, while 32 percent had an established cloud policy. The remaining 7 percent, said they had a strict no-cloud policy and cited security concerns (86%), compliance concerns (86%), privacy (79%), data retention and destruction (79%) and data residency (57%). For some context, the survey queried 102 participants globally from banking/credit unions (35%), insurance (13%), investment (11%), government (7%), and other professional roles (34%) over a 13-week period during the fourth quarter of 2014.
Perhaps what is even more striking is that the survey found many financial services institutions aren’t just planning to use private clouds. In fact, 70 percent of the companies with existing cloud strategies have moved from hybrid clouds to either a mix of private and public cloud or mostly public cloud, the survey said.
The panelists at The Trading Show said there is increasing interest in using public cloud services to reduce cost and increase capabilities. Private clouds will continue to gain traction, they said, especially when public cloud isn’t a viable option for applications and data that have strict security and compliance constraints or specific performance requirements. They emphasized that private versus public cloud is not one-or-the-other, but rather a spectrum, so it is important to architect a cloud environment that supports the movement of workloads between private and public over time.
The executives also said that much of the savings they expect from both private and public clouds will come from using on-demand computing models for workloads that don’t need always-on infrastructure. But it isn’t just about cutting costs. With cloud computing comes the opportunity for applications such as big data analytics, and the panelists said they expect these capabilities will create new revenue streams for their organizations.
One of the most interesting topics discussed during the panel was microservice architectures, which is a way to reduce monolithic applications into reusable components that can be arbitrarily wired together to create new functionality. The components can be independently moved across infrastructure boundaries as requirements dictate. (By the way, Red Hat hosted a technical webinar on microservices June 11, at 11 a.m. ET. The webinar covered the differences between microservices, SOA, and monolithic applications; the discipline, automation, testing, resilience, failover, team composition, and other requirements that make such an architecture successful; the relationship of microservices to Platform-as-a-Service (PaaS), containers, and DevOps; and the disadvantages of microservices architectures. You can still listen to the Microservices: the good, the bad, and the ugly webinar, so do check it out!)
It was fantastic to sit down with financial services executives and hear firsthand the challenges and opportunities they have when it comes to cloud computing. For Red Hat’s part, we continue to develop our portfolio to facilitate the strategies and vision financial services companies have for cloud computing. Containers and Red Hat Enterprise Linux 7 Atomic Host provide an application packaging and delivery mechanism that uniformly runs applications across traditional infrastructures private/public cloud infrastructures. Red Hat CloudForms and Red Hat Satellite 6 provide infrastructure management from your bare-metal on-premise hosts, across your traditional virtualization and on-premise private cloud, and out into the public cloud.
Red Hat OpenShift and the Red Hat JBoss Middleware Portfolio provide the underlying mechanisms for development of microservices, deployed either inside the data center or in the public cloud. Finally, Red Hat Identity Management provides Identity and Access Control for your Red Hat Enterprise Linux infrastructure, regardless of location.