The global finance industry has always been held to super high standards of accountability but today, the sector faces more challenges than ever before. Constant new regulations along with the increasing importance of data management means that finance people often struggle to manage and access information as efficiently as they would like.
As with other industries, finance will often turn to cloud solutions for flexibility and scalability, but this brings with it a whole ‘nother set of challenges. While this can be a great solution, it can only work with clear governance, cost controls and visibility into usage. Without these, migration becomes an ongoing struggle to balance cost, performance, security and compliance - not to mention the daunting initial cost of the tech.
In this article, we’re going to be opening the books on how the financial services industry (FSI) can adopt cloud solutions without sky high costs.
Battling The Data Bottlenecks
By their very nature, financial organisations generate
tons of unstructured data through customer interactions and transactions - and needless to say, this data is incredibly sensitive. With every single touchpoint, every single day, more data is accumulated and trying to manage these ever increasing volumes can be overwhelming. Many banking and non-banking businesses find that they are constantly facing major data silo bottlenecks which they try to manage by flashing the cash on more resources - but it doesn’t have to be that way.
A centralised content cloud platform can help in a number of ways including more efficient data processing, reduced IT maintenance costs, fewer infrastructure investments and, most importantly, reducing the need for multiple siloed systems. Intelligent content workflows and automation also means that personnel are spending less time on data entry,
document management, and processing; reducing errors while ensuring compliance.
Picking a platform for cloud cost optimisation
Sounds good right? But how do you pick the content management platform that will line up with your needs? As with any investment, this isn’t a decision to be taken lightly, So here’s a checklist that will help you on your way:
- Security is absolutely paramount when it comes to file sharing with financial services! You absolutely need to avoid data breaches and cyber threats, so, enterprise-grade security protocols and end-to-end encryption are must-haves.
- AI driven platforms will help to future proof your investment and keep you compliant with regulations set by agencies such as FINRA, OCC and the SEC.
- Integration is everything if you don’t want to be constantly shelling out for new tech and so you want a workflow solution that will easily snuggle up to your existing CRM systems, analytics tools and customer-facing applications.
Refining FinOps for proactive cost savings
One sticking point for the finance industry is the fact that the spend model of the cloud is variable, with costs fluctuating widely depending on usage. This often means that financial institutions are reactive rather than proactive when it comes to spiralling cost issues. This is not by any means a great way of handling change.
While not a new concept, FinOps is becoming ever more sophisticated - and something that a lot of businesses still struggle to get to grips with. This is, however, essential in order to create a proactive governance framework that will drive accountability across your organisation. Unlike traditional capital expenditure models, cloud spending is dynamic which can save you money but only with a clear strategy and roadmap. You therefore need some best practices to ensure that you create a shared responsibility across financial teams and cloud engineers - and here’s how it’s done:
- Establish clear cost allocation tags from the get go through showback or chargeback models. These connect cloud resources directly to units or applications and keep stakeholders accountable for spending decisions.
- Prevent nasty financial surprises for stakeholders by setting spending thresholds with automated alerts.
- Create cross functional FinOps teams which bring together finance, engineering and business stakeholders with regular meetings to review spending patterns, identify optimisation opportunities and make sure that cloud resources are aligned with business priorities.
Rightsizing your resources
When moving to the cloud, many businesses commit the sin of over-provisioning by allocating more resources that are actually needed, leading to overspend and waste. While erring on the side of caution might seem sensible, it can be an unnecessary waste of cash when your company doesn’t need peak loads 12 months a year.
Rightsizing is the fine art of matching your instance types and size to your actual workload for better efficiency and cost savings. As a general rule, financial applications have predictable usage patterns which revolve around market hours, month-end-processing and quarterly reporting cycles. This gives you an automatic advantage as you can use these insights to implement scheduled scaling policies; for example, your market analytics platform might need considerable oomph during trading hours but minimal infrastructure during the wee hours.
Start by analysing historical usage patterns across all your applications, paying close attention to those that constantly run below 40% CPU and memory as these can be downsized immediately. Legacy lift and shift migrations are also prime suspects for over-provisioning so review these workloads first as well as looking at refactoring critical applications to cloud native services which automatically scale with demand.
Level Up Your Cloud Strategy
When your business is all about money, every penny counts - and yet many financial organisations still fail to give cloud costs the same attention as their investment decisions. Addressing the cost-related challenges of cloud implementation is a lot less complicated when portfolio management principles are applied to cloud resources right from the beginning. You can start small with continuous measuring and optimization, and you’ll start to see enhanced efficiency and cost optimisation almost immediately.
In a world where AI driven solutions are essential for survival, the finance industry really does need to shake off its fear of change, and get working with the cloud in a more efficient and cost-effective way.
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