Finance And Insurance: How To Implement The Cloud Effectively

The evolution of relationships with customers and the market demands are now pushing companies in the finance world to accelerate infrastructure and application changes. The cloud offers significant benefits in critical and highly regulated areas, as long as you have a sound strategy and make the most effective implementation choices. Today, companies in the financial and insurance sector are among the most pressured by the digital transformation, under the double thrust of the change in customer relations and the requests of the legislator for the creation of a more open and competitive market. 

A condition that requires accelerating the transformations underway as much as possible, with IT tools that make it possible to gain flexibility and speed of the business and, in particular, with cloud services, through best practices and implementation strategies appropriate to the sector. Choosing a correct cloud adoption strategy is a fundamental prerequisite for obtaining benefits from new services in full compliance with regulatory requirements: always a critical point to overcome for innovation in the financial and insurance sectors.

The Prerogatives Of The Cloud For The Benefit Of The Most Critical IT Environments

The experiences gained in the most diverse business areas show how cloud services are now mature to be used even in the critical areas of finance and insurance, thanks to the offer of ad hoc solutions by significant providers and the substantial openings made on the regulatory level regulatory bodies. Many initial obstacles to cloud adoption, such as the geographic location of data, service resilience, security, or contractual and administrative rigidities, have been overcome. 

Banks and insurance companies can use the cloud for low-cost hosting of their containerized or newly introduced software and use more advanced Saas, Paas, and Faas cloud services. The cloud simplifies infrastructure provisioning, ensuring compliance with time-to-market in projects; it helps to withstand peak loads and offload internal systems from the heavier data analysis tasks. Facilitates the creation of secure data platforms to manage the aggregation of information, which must be made available online or via app to customers. 

The use of the cloud helps simplify operations and connect the API layers used for integration in open banking areas, as required by the PSD2 directive. Thanks to the tools offered by some providers, it becomes possible to integrate cloud services with those of the data center (for servers, networks, load balancing, and security), allowing IT teams to manage internal and external resources with the same level of control. With the cloud, it is possible to access state-of-the-art services for high-performance computing (HPC) for the use of the blockchain to exploit machine learning and artificial intelligence capabilities.

How The Cloud Is Implemented In Banks And Insurance Companies

The adoption of the cloud and cloud-native applications is today a reliable measure of the maturity of information systems which, in the context of applications close to the core-business, sees many companies in the insurance and banking sector lacking due to the difficulties of carrying out the necessary technological, organizational and methodological changes together. Adopting the cloud requires a strategic approach that combines the most effective technical frameworks with changes to processes and organization.

A cloud adoption project can only be initiated by clearly understanding its state and what it takes to achieve improvements. Therefore, it is necessary to start preparing for migration, decide the strategy, operational models, and fine-tune the approach and technological platforms. The actual transformation phase involves:

  1. The design of operational processes.
  2. The movement of the application software.
  3. The passage of users to the new services.

The last step is optimization, which aligns the cloud deployment strategy and business objectives over time. Insignificant deviations, the opportunity for further migrations or additional services that can help innovation and benefit the business should be considered.

A Key Issue: The Modernization Of Legacy Applications

While not the primary prerogative, reducing IT costs plays a vital role in adopting cloud services, particularly when offloading mainframes and legacy applications. Cloud services help to lighten internal systems in data analysis, very greedy in terms of MIPS, supporting the different ways of modernizing obsolete software and starting with simple rehosting, which consists of bringing applications to the cloud without code changes. Refactoring follows, which includes some restructuring and optimization interventions to use modern database and analysis services provided in the cloud. 

To an even greater extent, cloud services support application modernization options achieved through rebuilding, i.e., with the functional rewriting of the application in cloud-native logic based on microservices. The latter option is the one that allows you to obtain the maximum flexibility of the software running in cloud environments and the most straightforward integration with other services on the market.

A Methodological Framework To Accelerate Cloud Adoption

Among the frameworks that help insurance and banking companies to obtain the advantages of the cloud, there is Reply Cloud Adoption Framework for Enterprise ( CAFFE ), the result of the best practices developed by the Italian integrator over years of migrations to large service providers. The CAFFE methodology is based on four fundamental elements: cloud operating model, organizational design, landing zone, and toolchain.

With the definition of the cloud operating model, the company defines its expectations regarding what it wants to obtain from the infrastructure, from the applications, and therefore on the issues of risk management, reliability, security, and regulatory compliance. The organizational redesign follows the necessary changes in the company structures, team roles, responsibilities, skills, and training to adapt to the new cloud-based environments. Further technical phases involve creating the landing zone, i.e., the platform that makes fast provisioning and cloud deployments possible with the prerogatives of account, network and data center security. 

Also Read: Data Backup Trends In The Cloud

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