Data centres
While cloud computing has numerous benefits, critics say it suffers from security vulnerabilities.
“We consider our cloud journey to be ongoing and we will continue to migrate data and workloads to cloud when it makes financial and business sense to do so,” a HSBC spokesperson says. “Whilst we will do our best to avoid growing the footprint of our data centres, we continue to invest to maintain the best-in-class standards for security, resilience and sustainability that our business demands. In summary, we are moving more workloads to the cloud, but we continue to use and invest in our on-premise infrastructure.” As Chemla hints in the case of JP Morgan, security remains a key concern for a heavily regulated industry that is seeking to balance agility and cost-efficiency with data protection and cybersecurity. And if mixing the public and private clouds is one way forward here, combining the cloud and physical data centres is another. “To me, the main merits of on-premise data centres are data protection, cybersecurity, and resilience in case of problems with network access,” Chemla says. “However, they also require investment.” Certainly, fans of cloud technology are keen to praise its ability to deliver more efficient processes and improve the performance of data-intensive applications. They also point to the ability to innovate more efficiently through the rapid development of new products and services, shorter product deployment cycles and faster responses to market feedback. Critics of public cloud, however, still point to security as a potential weak point. As recently as December 2021, a breach of AWS saw hackers steal personal data on three million users of online booking company FlexBooker. In the same month, compromised Google Cloud accounts were used to mine cryptocurrencies.
All the same, leaning on public cloud infrastructure means banks benefit from ongoing security investment by the likes of Google and Amazon – saving them money and boosting their safety. For their part, both
Future Banking /
www.nsbanking.com
Google and Microsoft have recently announced multibillion-dollar acquisitions to boost cybersecurity and improve responses to security breaches.
Are the days of on-premise data centres numbered? In terms of data security, then, the jury is still out. Just last year, the Bank of England warned financial institutions about the risks of adopting public cloud provided by a small number of large companies that dominate the market. Nevertheless, the balance seems to be tilting in favour of CSPs.
That is overshadowed, too, by an evolution in how banks think about their cloud computing strategy. With more and more core processes placed in the hands of the leading CSPs, companies like Microsoft are in turn being forced to develop a deeper understanding of the specific needs of banks. Despite these efforts, it seems clear that private clouds are destined to survive in one way or another – with cybersecurity again the deciding factor. “To me, the number one risk mitigation strategy is to have a private cloud infrastructure, but I expect it may take a cyberattack or a large-scale failure on a public cloud infrastructure for people to realise this,” says Chemla. “Of course, I realise it takes scale and scope to be able to digest such private infrastructure investments.” In short, it would seem that cloud infrastructure – whether public, private or hybrid – will soon take over as the dominant model. But with JP Morgan and others still spending billions on on-premise data centres, it might be too early to make that argument with total confidence. Only time will tell whether the full transition to the cloud will happen – or how fast. But when asked whether on-premise data centres will soon be a thing of the past, Chemla is clear on what the industry can expect. “Broadly speaking,” he says, “I would expect they will.” ●
54% Statista
30–50% The Bank of England
believes that cloud computing has the potential to reduce technology infrastructure costs.
Bank of England 33
In 2021, cloud workload adoption in organisations from the financial services and banking industry stood at over half in the US.
Dilok Klaisataporn/
Shutterstock.com
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