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Among all the coverage, talk and hype over cloud computing, we’ve been interested to see what the financial sector is doing. We work with a number of companies in this industry and, in our experience; they’re a pretty savvy group. Some large banks are testing cloud computing due to its agility and cost-efficiency. Other banks are waiting for answers to security and regulatory questions before they consider the cloud. And a handful of banks still aren’t quite certain what benefits cloud computing will offer them.
Financial services data centers tend to be high-density environments, so along with privacy and security concerns, we (of course) like to think about cooling and power consumption. It doesn’t matter where the data center is located – it still needs to be monitored and maintained.
Opinions of bank CIOs on whether they are comfortable housing their secure data in the cloud vary tremendously. At one extreme is Michael Harte, CIO of Commonwealth Bank of Australia. In a 2010 speech to the Committee for Economic Development in Australia, he said, “We will never buy another data center. We will never buy another rack or server or storage device or network device again.”
At the opposite—and more common—end of the spectrum are those bankers who are skeptical about using the services of an external cloud provider, according to a survey by Bank Systems & Technology.
We think the folks at Ovum Research have it right: there’s a middle ground where financial services can play safely: so-called “hybrid clouds.”
Ovum predicts that hybrid cloud computing will become the norm for large banks and that those with multiple legacy and mainframe-based applications will be the last to move to the cloud. Equally important, the banking industry is not rushing to adopt cloud computing because of regulatory and security concerns. They expect legal and technical clarity and a big move to the cloud by banks in the 2012-2013 timeframe.
We think that means some computing will reside behind lock and key on the financial services organizations’ premises in private clouds, while some computing – perhaps development and non-customer data-intensive applications – can move “to the (public) cloud.”
What do you think?
