The wise man built his bank upon the cloud

Financial services organisations have traditionally been very cautious of moving their IT to the cloud, but as it has become more widely adopted, initial concerns over security have become less of a barrier. The emergence of new competitors, such as Atom Bank, has provided further incentive for high street banks to consider a move to …

by | September 2, 2015 | Dynatrace

Financial services organisations have traditionally been very cautious of moving their IT to the cloud, but as it has become more widely adopted, initial concerns over security have become less of a barrier. The emergence of new competitors, such as Atom Bank, has provided further incentive for high street banks to consider a move to the cloud. These new challenger banks were born in the cloud era and consequently have much lower operating costs than their more established rivals, enabling them to offer more competitive rates and launch new services with a faster time-to-market. As a result, the high street banks are now scrambling identify which services they can move to the cloud safely in order to remain competitive.

As more of their workloads are moved to the cloud, it is crucial that banks have confidence in the ability of their service provider to support their business needs, whilst also providing value for money. Would you invest heavily in stocks before researching the firm’s past performance? Probably not, yet many of those moving to the cloud are prepared to do so with little assurance of the service’s capabilities. The harsh reality is that, whether you’re creating your own private cloud or using a service provider delivering public cloud services, poor performance will immediately erode customer trust; reduce end user adoption; and ultimately impact revenue.

Chasing returns

It is an unavoidable truth that infallibility is impossible when it comes to the cloud. While a cloud service may promise high availability – for example, Microsoft guarantees 99.99% availability – this still leaves a margin for downtime that the 24/7 banks of today cannot afford. Major outages, such as that suffered by Microsoft when its Azure cloud service went down last year, prove that no provider is immune to experiencing an outage; which can potentially cost around £3,000 a minute. What’s more, this type of outage is not a rare event.

However, it’s not just the availability of a cloud service that is important; it’s also its performance, which can impact the experience for end-users. While a cloud service may well be ‘up and running’, it may also be performing at a painfully slow speed. Unfortunately, the majority of cloud providers only offer an SLA that guarantees customers certain levels of availability. Measures around performance are less common, leaving customers to take a leap of faith and forced into a ‘take my word for it’ scenario – which can ultimately be detrimental to a banks’ operations, should performance problems occur.

Monopolies

A recent survey reveals that the majority of companies believe the SLAs offered by cloud service providers are too basic and fail to address the risks they face as a result of moving to the cloud. Research also shows that 60% of businesses using cloud services worry that co-located tenants could negatively impact the performance of their applications by monopolising shared resources. This ‘noisy neighbour’ effect can be a particular problem during peak hours of the day, such as when financial markets are opening and traders are logging on at the same time. In much the same way that a bank needs to ensure there’s enough cash in the ATM for everyone who needs it; cloud providers need the ability to guarantee the reliability of computing resources and ensure the demands of one don’t impact upon the many.

Ready for the opening bell

With the lack of confidence in the guarantees offered by service providers apparent, those moving to the cloud must demand granular SLA assurances around performance and rapid problem resolution. To get on the right track, there are three basic measures that should be taken to ensure greater stability behind applications and workloads in the cloud:

1. Financial services firms should insist on SLAs that are measurable against their objectives, not the cloud providers’ reporting needs. By defining expectations in the context of what is important to the business, financial services firms can set the parameters of their SLAs to provide the greatest protection to their most important areas. They can also determine how they will be notified and what the committed response times and escalation paths are in the event of a service problem.

2. In an age when customer loyalty is fleeting in the finance industry, a poor end-user experience can quickly equate to lost business. Every user and every transaction is essential, so a monthly availability report fails to provide the insights needed to protect revenues and react quickly with proactive support for those experiencing problems. Banks need 24/7 visibility into performance from the perspective of every single user to ensure that nobody falls through the cracks.

3. Financial services firms need visibility into public cloud infrastructure, with the ability to identify network bottlenecks and track resource utilisation. This insight will empower them to challenge their cloud provider over resource availability and over-utilisation that could be impacting on the quality of experience their end-users are receiving. They should also tailor their SLAs to put the onus on cloud providers to identify and move noisy neighbours before they impact performance.

Cashing in on the cloud

It is understandable that customers are calling for cloud providers to guarantee more than just availability. The performance of a cloud service is equally as important, and can massively impact a banks’ operations. As a result, the everyday cloud provider has a long way to go before their SLAs are aligned with the needs of customers. In the meantime, banks can empower themselves to hold their provider to account by monitoring the performance of their cloud services proactively, rather than relying on the often obscured reports offered by providers. This will put the established high-street players in a better position to compete with the challenger banks by realising the true potential of the cloud.
 

By Michael Allen, VP of APM, Dynatrace

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