The benefits of cloud technology are becoming clear to banks, but concerns linger over being locked in to a single vendor.
Banks are embracing cloud technology, not just to save costs, but to benefit from the automation, scalability, elasticity and speed to market that cloud provides. It also gives them access to state-of-the-art tools being developed by the large cloud providers in areas such as artificial intelligence, data analytics and risk management, at a pace that no bank could match in house.
Today, most banks are working with a single provider to build out their skillsets, increase standardisation and reduce complexity, recognising that managing several vendors creates governance and audit challenges, as well as talent issues. However, moving hundreds of banking applications and vast amounts of bank data to a single cloud provider has raised vendor lock-in concerns from banks and regulators alike.
Many large global cloud providers, including Alibaba, Amazon, Google, IBM and Microsoft, are championing their commitment to open-source protocols to allay such fears around portability, although some technology stacks are more open than others. They also help customers build applications independent of specific technologies using a containerised strategy, such as Kubernetes (also open source), which adds an abstraction layer. In theory, this should make it possible to move to another cloud provider if needed; however, it does add complexity and can affect performance.
As banks expand their cloud competency and vendors develop strengths and capabilities in specific areas based on their expertise, a multi-cloud strategy becomes more viable and attractive. Clearly the big cloud providers are preparing for this prospect, while each strives to be the premier platform for the financial industry.
