Cloud computing has been offering IT services as commodity for the IT industry. As the cloud service scopes are evolving, even the traditional business models and deployments modes of it and are changing drastically. Listed below are the traditional business models.
Cloud-based FinTech Traditional Business Models
Software as a Service (SaaS): The Cloud Service softwares and applications for the customers can be used by the organizations without any overhead of maintaining the software.
Platform as a Service (PaaS): The Cloud Service Provider provides the platform for the customers, which can be used by the organizations to develop the softwares or applications required for their business. The developers are provided with APIs, using which the developers can access the platform and the software tool kits provided by the service providers.
Infrastructure as a Service (IaaS): The Cloud Service Provider provides the Infrastructure for the customers, which can be used by the organizations to deploy their business critical softwares and applications. The customers only have to worry about the availability of the Infrastructure hosting their services and all other maintenance activities like monitoring, storage, backup, network and security of the infrastructure will be taken care by the service provider.
Security as a service (SECaaS): Security, as a whole, is taken care by the service provider, starting from the infrastructure security to end-point protection. The complete range of security portfolio is supported by the service providers.
Mobile “backend” as a service (MBaaS): The developers are provided a link for them to connect to their applications to the cloud storage and cloud computing services.
Serverless computing: The organizations or the developers are not involved in any kind of activities related to the infrastructure like restarting services on the virtual machines for an application to perform in the correct manner. All developers can execute the applications without any dependency of the type of server provided for them.
Cloud-based FinTech Deployment Modes
Along with the above-mentioned Service models, there are various deployment modes as well, in which the Cloud can be implemented. These various deployment modes are:
- Private cloud
- Public cloud
- Hybrid cloud
- Community cloud
- Distributed cloud
With so many options and service models, the Finance market has also started the transition from legacy operational modes to Cloud Computing. For any financial firm, the most critical part of their business is to ensure Data Privacy. It can be customer’s personal information, transaction details or any other financial data. The “C” part of the CIA (Confidentiality, Integrity and Availability) triad prevails for the financial firms. Also, many countries have many regulations regarding the data privacy norms which the financial firms should abide with, in order to operate in that particular country.
The cloud service providers have started providing advanced security features and also trying to meet the compliance requirements because of which Financial services are finding value add to their business when they are making decision on transformation to the Cloud.
Many Cloud service providers are providing services that are specifically customized for Financial sectors, like
- Insurance Data Exchange Cloud Service
- Financial Services Revenue Management and Billing Cloud Service
- Insurance Revenue Management and Billing Cloud Service
- Financial Services Lending and Leasing Cloud Service
- Banking Cloud Service
- Health Insurance Value Based Payment Cloud Service
Legal, Regulatory and Data Challenges
As mentioned earlier, Financial sector have their own inhibitions regarding the transformation to the Cloud. Let’s try to understand what challenges the Financial sectors are facing while migrating the services to the Cloud.
- Regulatory compliance while migration to the cloud should be followed by the financial organizations.
- Clarity on how the data stored in the cloud will be secured.
- As the data resides in the cloud, it is practically very difficult to identify where the data is present at any point of time.
- No proper clarity and visibility for the users, about the operational and security mechanisms provided by the cloud service provider.
- It is way too complicated to migrate the services to the cloud.
These challenges are something which needs to be addressed well, even before the Financial organizations start migrating their services. This will ensure the organizations to establish their credibility among the stakeholders, as Cloud technology is capable to create a positive impact across the organization. Hence, selecting the right cloud service provider should be the most critical part of the strategy that the organizations should be focused on.
Cloud Service: A boost to the Financial Sector
Adopting the Cloud Computing will enable the Financial organizations to explore the territories which are still unexplored. This will help the Financial organizations to maintain a substantial growth and sustain the highly. The organizations will be able to reduce their CAPEX and OPEX budgets, as the overhead will be taken care completely by the service provider. This will enable the organizations to invest these additional funds in new ventures and services, which can the organization to increase the service portfolio and improve the user experience. Also, having the complete infrastructure supported by the cloud service provider, helps the financial organizations to smartly transfer the Risk factors related to the Data Centre and Infrastructure. For any financial organization, Risk analysis is a very critical activity and with cloud computing offering solution, the organizations can reduce the Risk for their own business. This helps the organizations to focus more on their core business.