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Role Of Data Centre And Cloud In Banking Industry

If we try to translate business priorities into IT, there are interesting insights that can be derived

Indian digital eco-system is continuously evolving, with key entities being, central Identity service Aadhaar, Payment infrastructure revamp with UPI, Telecom providers acting as banks, payments bank like PayTM, emergence of FinTechs (according to E&Y survey, India has the 2nd largest adoption of FinTech community).

While this kind of revolution is racing, to provide the best frictionless customer experience, optimize the backend processes and leverage the 3rd party services, it puts immense pressure on IT.

Apart from the digital eco-system, priorities of banks are also changing. With the fast changing pace themes like Frictionless Customer Experience, Hyper-Personalization, Enablement to participate in newer business models & Operational efficiency emerge as key priorities for the bank to remain competitive.

If we try to translate business priorities into IT, there are interesting insights that can be derived.

Key to customer 360-degree view and frictionless experience is Bigdata. Capacity to handle this scale and volume of data and managing the storage capacity becomes key. Time-to-market becomes key for sustenance and hence dynamic provisioning of infrastructure is the way forward. Conventionally networks and data centres have been too complex and hardware-driven to respond to rapid changes. Banks are exploring to automate the management and configuration of virtual networks based on high-level tenant requirement specifications, called intents. Future lies in, Intent-based networking based on SDN protocols, using intelligence, automation, and control from a software layer over the network.

Crunching this huge data to create real-time customer profiles for hyper-personalization, demands supercomputing power to generate real-time contextual offers. As the number of devices on enterprise networks multiplies, the streams of data flowing in your data-lake grow multi-fold. Avoiding overloading the infrastructure becomes critical and capability to have intelligent edges to filter this data becomes paramount. Adding Cloud-based computing power to the edge becomes critical. Edge processing should ideally focus on concentrating data, analysis of the data for building the context, and then leveraging it to arrive at key decisions.

With some of the compute-intense workloads shifted to cloud and conventional workloads still remaining on-premise, the integration becomes challenging, unless the enterprises have invested in a robust API platform. Also, the cloud providers are coming up with Use of incremental technologies to lower the risks. For example, companies can get a few racks of servers in a cage, and when they are ready to use cloud services, a provider creates a seamless cross-connect to the environment. API platform will not only make the transition between cloud and on-premise seamless, but also open avenues for building complex, multi-entity business models. This will also provide levers to bring in cost and operational efficiencies.

While the above scenarios become inevitable, three important considerations for bankers which need to be addressed by Cloud providers is cost, security and regulatory compliance.  

Banks have the option to engage in four types of cloud-adoption models private cloud, community cloud, public cloud or hybrid cloud, with different levels of risk to security. For now, Indian banks are venturing into a private cloud, opting security over scalability and cost. Some global banks have already moved core services to the cloud and have used private or hybrid cloud models with key providers like Amazon, Microsoft to keep sensitive data within banks firewalls, and comply with regulations.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

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data centre cloud computing

Abhijit Shah

The author is Chief Technology Officer for DCB Bank. He is responsible for Digital transformation related to Run-the-bank & Change-the-bank initiatives, Technology Strategy and Innovation, Partnerships with Fintechs, Regulatory bodies, Consortiums, and Vendors.

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