Data centres
Donovan started his working life in a data centre at the age of 17. Back then, 1MB of memory had to be carried around on a trolley. But times have changed and technology has advanced at an astonishing rate. The proliferation of data storage mechanisms – proprietary data centres, private cloud servers and public cloud services – means that banks have many options at their disposal. “Providers of public cloud and data centre hosting are making huge capital investment in data centres, networks, computing and storage,” explains Donovan, “and, on the wholesale banking side, ING plays a key global role in providing financing solutions because there is no stopping the data centre market.” The difficulty for the financial services sector, however, is whether to invest in their own data centre estate or whether to move more data into the cloud. That decision is not necessarily binary, and with cost, scalability and speed of deployment all key issues affecting a bank’s data strategy, there is a delicate balance to be struck.
On the ground or in the sky? Historically, many banks – ING among them – have owned all of their data centres. But that has changed with the advent of scalable and secure cloud services. Now, ING has a dual model. It owns and operates some of its own data centres, while also using a co-location model, leasing space in data centres but operating the servers itself. The bank currently has two core strategic data centres in the Netherlands, one owned and the other leased.
Not that the data centre industry is in any trouble – but there has been a dramatic change in who owns and operates them. ING’s own lending book shows clearly that the bank has recently underwritten a £450m infrastructure loan with UK-based Ark Data Centres to fund capital expenditure, related to its vast expansion.
The rapid adoption of cloud services by many industries, not least financial services, is driving cloud providers such as Amazon and Google to invest heavily in expanding their data centre estates. Banks are still relying heavily on data centres – but more often than not, they do not own them directly and rely on the infrastructure provided by their cloud services providers.
“In general, data centres are here to stay and there will be a need for more of them in the future,” says Brendan Donovan, global head of IT infrastructure at ING. “It is my job to focus on the bank’s digital infrastructure and I see a need for both public and private cloud capability for the medium term. There is an explosion of data storage for customer and regulatory needs. This will continue over the next five-to-ten years in an exponential way, as every process becomes digitised and mobile computers are in everyone’s hands.”
Future Banking /
www.nsbanking.com
“The propensity now in ING is not to own data centres because there is a vibrant third-party business in co-location,” says Donovan. Some large banks, however, continue to invest heavily in their own data centre infrastructure. Crédit Agricole, for example, is rolling out immersion cooling technology to more sites in its data centre estate. The technology is a simple way of increasing computational power in the French giant’s server farms – having already been successfully trialled at its largest data centre, where it manages more than 40% of its computing workload. Many more banks, however, are focusing their investment on cloud services. In 2020, for instance, HSBC signed a global deal with Amazon Web Services (AWS) to improve agility and reduce costs. The move is part of a major restructuring effort centred on digitalisation, and will focus on computing power, data storage, analytics, machine learning capability and many other factors. Altogether, they will help the bank develop digital products for its personal banking customers. HSBC has also used Google Cloud services in the past, migrating a legacy data warehouse over in 2019, while Germany’s Deutsche Bank has turned to the American megacorporation as it starts the process of
597
The total number of large data
centres operated by hyperscale provided at the end of 2020 – having more than doubled since the end of 2015 – with more than 50% operated by Microsoft, Amazon and Google.
Synergy Research
7.2 Statista 17
million
The total number of the world’s data centres is expected to reach this fi gure in 2021.
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