Digital Banking

FIs: Embracing The Cloud Involves More Than Business Continuity 'Lip Service'

Embracing The Cloud In Business Continuity

Financial institutions (FIs) are on the cusp of change, as the great digital shift is forcing them to bring new products and services to market with speed and agility.

That means updating legacy systems and bringing banking processes and infrastructure to the cloud.

In an interview with Karen Webster, Ariff Kassam, CTO at NuoDB, delved into the roadmaps FIs should develop as they move to the cloud over a timeframe that best aligns with end users’ evolving (and sometimes rapidly changing) needs.

At a high level, the pandemic has spotlighted the fact that access to data, systems, infrastructure and, ultimately, services does not work well if employees are stuck behind a physical data center located on-premise.

“Companies need access to systems wherever they are, wherever they live and wherever they are working from,” Kassam told Webster. “It has to be something that is available to everybody – and the cloud is what makes that happen.”

Against that backdrop, he said that companies are increasingly embracing public and private cloud initiatives. The conversation has shifted away from “why and when” to “now and how.”

Kassam pointed out that a successful cloud strategy must come from the top down, from C-level executives, and then stir up grassroots enthusiasm throughout the company.

One of the imperatives of adopting a cloud mindset is for the purpose of business continuity, he added.

“A lot of people play lip service to continuity,” said Kassam. “They say ‘OK, let's make sure we've got the checklist and that we've got things covered.’ But a lot of companies probably didn't have to execute anything in their business plans, and the pandemic has spotlighted holes and cracks that people were glossing over.”

The pandemic, too, has shown the limitations of some cloud strategies that may already be in place, he added.

As Kassam told Webster, some firms may believe they are covered with a single cloud provider, but should consider spreading their services across multiple clouds as they expand.

And in tandem with that expansion, to develop best practices, Kassam said it’s important to develop a risk profile/maturity decision continuum for moving to the cloud.

The first steps involve examining whether there is any resiliency within the firm. Typically, he told Webster, the smaller firms that are the least mature – with local systems and legacy tech in place – have not examined their disaster recovery or continuity plans.

Companies that are a bit more mature may be operating across multiple sites and have at least some disaster recovery roadmap in place. With cloud capabilities, there is a hybrid approach that promotes at least some shift to the cloud while keeping some infrastructure on-premise, said Kassam.

“This is the ability to say, ‘I’ve already invested in physical systems, and I will leverage the cloud for either disaster recovery or ‘burst capacity,’” he said, adding that “this can offer a business continuity plan that allows me to switch over to the cloud in case something happens.”

Some executives may decide that a hybrid approach is enough, and that they’d prefer to keep at least some operations on-premise for the time being. According to Kassam, this is the most common approach NuoDB has seen, as firms are hesitant to walk away from already significant investments in hardware and data centers.

“For mature payments companies, technical debt is tied to these on-premise systems,” Kassam noted.

For those companies, moving to the cloud entails what he termed “the path of least resistance,” where the company will choose a new project that can be launched in order to gain an understanding of how things work, and at least get up and running.

Kassam cautioned being complacent with a single-cloud approach, where companies bring everything to one point of contact. In some ways, the risks are the same as committing to a single, physical data center. Relying on a single vendor, such as Amazon Web Services (AWS), can expose clients to rising prices, outages or malicious attacks, all of which can have negative ripple effects, he warned.

The most comprehensive approach involves eventually transitioning to a multi-cloud strategy, where native, cloud-agnostic apps can be moved to different clouds as required – to grapple, say, with power outages.

Said Kassam: “There is no right answer, and there is no silver bullet here. It is a complex beast.”

In any cloud-based endeavor, he noted, it’s important for companies to start small.

“It’s about getting your feet wet, gaining an understanding of the cloud, getting a flag planted, and then taking that next step,” he said.



The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.