Data centres
Right: Many believe cloud solutions to be preferable due to physical data centres demand on size and workforce.
Previous: BNP Paribas’s data centre in Iceland, created in partnership with Dell and atNorth.
These considerations have come to the fore since the start of the pandemic. All sectors – not just banking – have seen an uptick in their data usage, with global internet traffic surging by more than 40% as ever more services moved online. This has prompted many firms to think beyond their own facilities. Data centre transactions more than doubled between 2020 and 2021, with the overall market expected to grow from $48.9bn in 2020 to $105.6bn by 2026.
$2bn
Rabbetts notes that, while many banks were planning digitisation projects pre-pandemic, Covid-19 had the effect of speeding them up. For instance, some banks set up virtual call centres in the cloud, which were ready in a matter of days. “The fact is that the catastrophe provided an inflection point which almost forced industries to break traditional patterns of working and evolve. Cloud remains very much a positive, enabling technology for this evolution,” Rabbetts stresses.
The reported annual savings made by Bank of America after building its own cloud. New York Times
38% 34 Going green
The percentage of collaboration and office applications banks currently host in the cloud, compared to 1% of risk and compliance workloads Accenture
The other benefit of cloud, and one that hasn’t escaped banks’ attention, is that it is significantly greener than running your IT facilities on-site. While data centres are certainly electricity intensive – they guzzle around 1.1–1.4% of the world’s total energy consumption, according to the International Energy Agency (IEA) – many are on a mission to reduce their footprint. Statistics from the IEA show that internet traffic surged almost 17-fold between 2010 and 2020, and data centre workloads more than nine-fold. Their energy usage, however, only grew by 10% over the same period – indicating that demand for data is being offset by efficiency improvements.
“As a general principle, the sector has been very responsive to sustainability concerns,” says Rabbetts. “If you look at those responsible for designing, building and operating today’s data centres, they are clear about the need to ensure efficient use of power because power is their largest operating expense. In
a very real sense, what’s good for the sector is good for the planet and vice versa.”
This ethos is reflected in movements such as the Carbon Neutral Data Centre Pact (CNDCP), a pledge by European industry to achieve climate neutrality by 2030. Internet giants like Amazon and Microsoft are taking steps to lower the carbon impact of their operations, while various small data centre providers are powering their generators via renewables. “These sorts of actions are becoming pervasive,” says Rabbetts. “The sector continues to challenge itself to answer questions like, how do you use water more efficiently? Is there a secondary use for resources such as data centre waste heat? How do we create a circular economy? These concerns affect data centres, cloud service providers and the financial sector alike.”
BNP Paribas’ approach
However banks choose to run their IT workloads, there are always going to be a few different factors at play. As well as sustainability, they need to consider the cost, security and complexity of their systems. “BNP Paribas is facing an ever-growing set of challenges that are constantly shaping its data centre strategy,” says Ricardo Jantarada, global head of telecom and datacenter at BNP Paribas CIB. “Our approach to those challenges is to have a differentiated strategy where we look, on a case-by-case basis, for the best solution to host our IT systems.” Jantarada adds that for general-purpose applications,the bank typically uses the IBM- dedicated cloud solutions, and that, for those that are not cloud-ready, the bank seeks out ways to improve its IT footprint on-site. With all its data centres, it thinks about sustainability in a holistic way. “In the past, cooling efficiency was the priority,” the executive continues. “We now expand our analyses to multiple domains, such as the origin of the electricity, the CSR and technical efficiency and usage ratio of the IT equipment, the reuse of the heat produced, the life expansion and finally the recycling
Future Banking /
www.nsbanking.com
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Shutterstock.com
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