Banks transform legacy systems with hybrid cloud solutions
- Posted on March 21, 2018
- Estimated reading time 4 minutes
Legacy IT infrastructure cripples innovation.
This is especially true for banks. In today’s economy—one shaped by interconnectivity and digital solutions—banks are searching for a way to compete with emerging FinTechs. But financial institutions are often working with IT solutions that are over 30 years old. That’s why many are transitioning to a hybrid cloud solution, which involves a mix of on-premises, private and public cloud services, in order to achieve greater scalability and integrated communication between disparate systems.
The reason for the move is that legacy IT infrastructure creates numerous logistical issues. These systems are often run in siloes and lead to a lack of synchronization and, ultimately, bottlenecks. They are also expensive – according to Financial News London, Banks typically spend 80% of their IT budgets on legacy technology maintenance, that’s up to $300 million spent every year managing and maintaining these disparate systems. That leaves little capital to move forward with strategic initiatives.
It doesn’t have to be this way.
A closer look at the key areas of concern for banks when migrating to the cloud, and the solutions offered by companies like Avanade, reveals a clear path forward.
Adapting to the modern economy
To stay competitive in the evolving financial services landscape, banks should embrace the interconnected nature of the modern economy. That requires branching outside of the closed systems they’ve traditionally operated in. One way to do so involves moving line-of-business applications to the cloud.
UBS, for instance, saved 40% on infrastructure costs, sped calculation times by 100%, and gained near infinite scale by using Microsoft Azure to power its risk management platform.
Leveraging a hybrid cloud solution allows banks to maintain and support their legacy systems while simultaneously taking advantage of cloud technology. And what can’t you do on the cloud? More and more companies are discovering that cloud services help them develop new services, monetize data, streamline supply chain management, and drive higher sales.
For instance, analytics and modeling on the cloud can reveal patterns in customer transactions that can be used by banks to create a successful new product. Internet of Things (IoT) functionalities can be used to support local branch representatives by analyzing consumer behavior across all touch-points and predicting the services a new customer is likely to desire. Plus, migrating to the cloud allows banks to consolidate their data center footprint, saving them money while increasing their scalability.
Keeping security top-of-mind
Data privacy and other security concerns are preventing banks from innovating as they should. An Avanade global study found that more than 53% of C-level respondents see security as a barrier to the implementation of a hybrid cloud solution.
While these concerns are valid, there are solutions available to keep a hybrid cloud environment safe for banks and their customers. Avanade, for instance, deploys a variety of security tools to protect your business:
- The Microsoft Operations Management Suite helps your IT team maintain consistent control and compliance; plus, it empowers them to remediate issues quickly at scale.
- The Azure Security Center provides a unified view of security across all on-premises and cloud workloads.
- The Azure Key Vault Service safeguards cryptographic keys and other secrets used by cloud apps and services.
On top of the immediate cost savings and improved communication between line-of-business applications, a hybrid cloud solution can facilitate product innovation and improved customer experiences bringing your bank into the future.
This is crucial as emerging FinTechs are exerting pressure on traditional banks to improve their digital presence. A hybrid cloud solution enables banks to reveal key insights along every step of the customer journey. These insights come together to form a holistic view of the customer.
The Avanade Customer Analytics and Insights (ACAI) solution integrates innovative analytics with customer-facing technologies, providing 360 degree vision of customer activity. Banks can use this information to improve digital experiences and predict customer behavior.
These advanced capabilities keep customers around longer, and make them more profitable in the long run, as you can more effectively cross-sell and upsell additional services based on their past activity and preferences.
Imagine banking. As it will be.
The benefits of migrating to a hybrid cloud solution are clear. You’ll save money on IT infrastructure, enable product innovation, and acquire a predictable, holistic view of clients, all with the security of Microsoft Azure. Leveraging the cloud is essential to remaining competitive in a fast-evolving market. With Avanade in your corner, you can achieve these benefits quickly and avoid roadblocks and hidden costs along the way.
Join the future, we’re waiting for you.