The COVID 19 pandemic encouraged digital adoption among consumers across the globe and, in turn, forced transformation in just about every business sector. And while this transformation was key in keeping people safe and the economy in motion, it also introduced new challenges - prompting many companies to turn to cloud computing as an enabler.
cloud migration involves moving applications, software, and programs from on-premises servers to a remote “cloud computing environment.” Moving to the cloud enables companies to only pay for the computing power that they need and quickly respond to the peaks and valleys of consumer demand for their services. Top cloud platforms, including AWS, Microsoft Azure, and Google Cloud Platform, enable businesses to lower costs and risks while simultaneously increasing scalability, accessibility, and flexibility.
The benefits of cloud services are undeniable. However, some organizations in the fintech industry are reluctant about migrating to the cloud because they lack the expertise in-house. With the right cloud migration partner, there’s no reason that this should impede your company from realizing the benefits of the cloud.
In 2020, many first-time adopters moved to the cloud to guarantee business continuity, but fintech companies are now leveraging cloud services to increase their competitive advantage. Cloud migration is no longer about adapting to the new normal but a crucial step towards digital transformation. According to Multisoft, 80% of companies report operational improvements within just a few months of adopting cloud technology. What do those benefits entail?
1. Flexibility!If the covid 19 pandemic taught the technology world anything, it’s that forecasting IT needs is becoming increasingly difficult. This is a major reason that many organizations are now favoring shifting more of their CAPEX budgets into OPEX line items. Utilizing subscription-based services like cloud technology, paid for as an operating expenditure, enables organizations to quickly meet unexpected changes in computing needs without the kind of rigorous approval process needed for major capital expenditures.
2. Avoiding technology obsolesce
Organizations using on-prem systems spend significant amounts of money upgrading legacy applications. Moving to the cloud frees your fintech firm from the costs of maintaining and scaling rigid legacy systems and the risks of investing in the wrong technology. So, your company can grow painlessly within the existing infrastructure.
3. Risk Management
Fintech companies face several infrastructure security risks associated with legacy on-premise solutions that may harbor unknown vulnerabilities. They also increase the risk of non-compliance with stringent data security requirements in the fintech industry. Cloud migration provides a way to mitigate or eliminate these risks.
Your cloud storage provider can implement automated backups and a detailed disaster recovery plan to protect your data at all times. An up-to-date backup speeds the disaster recovery processes, reducing the risk of lengthy downtimes. You can leverage solutions deployed in the cloud to automate financial compliance processes and mitigate operational risks.
Reputable cloud service providers in the fintech industry help their clients meet data governance regulations, including data protection and privacy laws. They provide a governance framework that addresses data ownership, data retention, and breach response. If your bank operates globally, you won't have to worry about overlapping and conflicting data protection laws across multiple jurisdictions. In short, cloud services enable a multi-country cloud strategy by facilitating regulatory harmonization.
4. Advanced-Data Management
5. Real-time Payments
As a CTO or IT manager in the financial services industry, you understand the benefits of real-time payments. Fintech companies upgrade their systems and adopt new integrations to provide fast and frictionless transactions. Cloud migration can help your firm achieve this goal.
Cloud services streamline payment processes by improving the speed and consistency of transactions. ensuring your customers receive or send money in the fastest way possible. . The cloud handles the entire process and secures transactions, which also enables digital banking with contactless payments.
6. Self-service applicationsCloud services enable a more accessible financial world through self-service applications that require a robust cloud platform with remote self-service technology to deliver your services to the masses.
And while the industry has long been aware that self-service apps, enabled by cloud technology, can reduce operational costs, covid 19 increased focus on the importance of digital onboarding and the platforms needed to make this possible.
CTOs and IT managers can implement their cloud migration strategies using seven approaches. Regardless of the state of your IT environment, you can find a cloud migration model to meet your company’s needs. Analyze what your fintech firm seeks to accomplish from cloud migration. Why and what do you need to migrate to the cloud? Then, choose a cloud migration approach that fulfills your organization's objectives.
The 7Rs in cloud migration stands for refactor, replatform, repurchase, rehost, relocate, retain, and rehire. Each R is a unique cloud migration approach, ideal for specific scenarios. Fortunately, cloud service providers allow you to combine two or more models. You don’t have to migrate everything. For example, you can retain some applications within on-prem systems for retirement or refactoring and relocate or rehost the rest. Here is an in-depth analysis of the 7Rs in cloud migration to streamline your decision-making and selection process:
Refactor
Platform as a Service (PaaS) is increasingly becoming the go-to model for fintech firms to access world-class features cost-effectively. Refactoring can help you leverage the benefits of PaaS. This strategy involves re-imagining the architecture of existing applications to add features or boost scalability and performance. You can refactor apps in a serverless environment to speed your modernization process.
Refactoring requires code changes, leading to the loss of legacy application code and development frameworks. Specialists use cloud-native PaaS features to refactor applications. This strategy links your systems to the provider’s cloud platform, providing access to advanced developer tools. If your apps are not suited to a cloud environment, use refactoring to modernize them. Be aware that this option is usually the most expensive cloud migration strategy.
Re-platform
Re-platforming allows you to run your applications on the cloud provider’s infrastructure. This strategy doesn’t require changing the core application architecture, however, you’ll need to make a few optimizations to maximize the cloud migration benefits. For example, fixing known security vulnerabilities in your app can help you get the most out of cloud security protocols.
Re-platforming may also require code changes. But it enables backward compatibility, allowing developers to reuse existing code caches and legacy programming languages and frameworks. Luckily, the replatform strategy doesn't involve changing the application's functionality which can reduce the overall cost and time needed to execute your cloud migration process.
Repurchase
This strategy often requires discarding legacy applications or platforms and migrating to a Software as a Service (SaaS) platform. Instead of replacing your on-premises system, you purchase a SaaS subscription. SaaS offers more flexibility than on-prem applications because it reduces the need for complex and costly development. It is a cloud-ready solution that allows organizations to meet urgent requirements or changes to business function.
The repurchase cloud migration strategy allows fintech companies to exploit the flexibility of the SaaS model and avoid the rigidity of legacy on-prem systems. But SaaS has its own disadvantages that require experienced guidance. Some on-prem apps may not run as intended on the cloud architecture, leading to interoperability issues. Also, you’ll have to hand over infrastructure choices to your cloud vendor. Choose an experienced cloud service provider to avoid issues down the line.
Rehost
Also known as “lift and shift,” rehosting involves redeploying the client’s applications to a cloud-based environment. Your cloud migration service provider lifts your apps from on-prem systems and moves them to a cloud-based hosting platform. It is the fastest way for fintech companies to migrate workloads to the cloud. You can choose this cloud migration strategy if your company needs to scale and meet urgent business requirements.
Rehosting may require making the appropriate changes to the application to align with the host’s configuration. But you can also migrate the application as it is. Re-hosting without implementing cloud-specific optimizations is a cost-effective option for large-scale enterprise migrations. Your cloud migration service provider can automate the lift-and-shift process and save you time. But a rehosting deployment doesn’t provide important Infrastructure as a Service (Iaas) benefits such as elasticity and scalability. You’ll need to migrate and transform your data in the cloud to maximize cloud benefits.
Relocate
Relocation is an infrastructure-centric cloud migration strategy. This approach allows you to create a virtual copy of your data center in the cloud. You can migrate your digital infrastructure to the cloud without implementing code and functionality changes. First, you’ll have to decide which tasks to relocate from on-prem applications to the cloud. Most fintech companies use this strategy as part of their disaster recovery plan. For example, migrating your host’s hypervisor to AWS to use VMware Cloud on AWS for disaster recovery.
The main benefit of using this cloud migration strategy is its speed and responsiveness. In the event that you don’t have enough resources on-prem to meet a sudden increase in your financial services, you can relocate a suite of applications quickly to address time-sensitive business needs.. In this case, relocating your infrastructure to a cloud platform with the solutions you need can help resolve existing scalability issues quickly and cost-effectively.
Retain
Fintech companies can use this strategy if they need a few applications to continue running on-premises. It is implemented as a point-in-time strategy. For example, you can retain applications earmarked for retirement or require time-intensive refactoring.
The idea is to avoid downtime due to complex cloud migration processes. You migrate mission-critical applications to ensure business continuity while your cloud specialist retires the retained apps or implements refactoring. This strategy can streamline your migration to the cloud and reduce time-wastage.
Retire
This strategy involves retiring unused applications identified during the discovery process. In many cases, unused applications can take 10%-20% of an enterprise IT estate and retiring them frees up IT resources that can be devoted elsewhere. Your cloud migration specialist can use application metering to determine the usage of deployed apps and migrate less important data tolow-cost storage.
Since fintech companies require large quantities of data to extract insights into consumer behavior, making storage efficiency crucial for business growth. This cloud migration strategy can also boost security by minimizing threats associated with obsolete applications.
Top-level managers don’t want to waste scarce financial resources on new technologies with nonquantifiable outcomes. As a CTO or IT manager, you’ll have to show how cloud migration will benefit the company. Use reliable metrics to assess UX, security, time factors, business interference, processes, and infrastructure capability.
Success metrics visualize hidden issues in your cloud migration, allowing you to correct them promptly and appropriately. So, you can use these metrics to enhance cloud adoption organization-wide or improve your cloud migration strategy. KPIs expose past errors, challenges in the present, and pitfalls in the future, guiding your organization’s transition to the cloud. The term “Success” is linked to your cloud migration goals. Choose the most appropriate metrics for your company. Whether you’re a CTO or IT manager, learn these 6 KPIs to measure cloud migration success.
UX- User Experience is Key
As a cloud migration metric, user experience provides insight into the ultimate success of cloud-based applications. Slow or unresponsive features on your banking app can undermine how successful your customers are in trying to utilize the resources they need and UX metrics such as customer satisfaction scores (CSAT), latency, and error rates can help surface hidden problems that could have great impact. By tracking feedback associated with low CSAT scores, you may find that the solution could be addressed by examining your cloud infrastructure. You can use latency to measure your apps’ response time or the error rate to determine the frequency of failed requests. Cloud-based fintech applications should have the lowest latency possible and zero failures. Tracking these important UX metrics is important in identifying hidden problems, such as improper cloud setups, lags, and internet overcrowding.
Security as a Top Priority
Financial institutions are prime targets for hackers and cybercriminals and your migration strategy must prioritize data and network security. Fintech companies can evaluate the security of cloud-based apps in several ways such as using indicators of compromise (IOC) to visualize unusual activity on their networks, leverage user audits, and analyzing access management features to determine their effectiveness in protecting your apps and data. Securing cloud-based apps is an ongoing process but worth the investment, especially in the financial services space..
Time-Calculate and Consideration
Before you begin the process, it’s important to calculate the time needed to execute your cloud migration strategy both to keep the project on track but also to identify potential issues as you go. For example, a big discrepancy between how long you projected a step should take versus how long it took in reality could bea red flag. It could be an indicator that someone cut corners, which could undermine the success of your cloud migration strategy. Fintech companies should also consider the inputs and outputs for each phase to ensure the process aligns with business goals from start to finish.
Business Interference in the Fintech Industry
Although CTOs and IT managers prioritize speed in the cloud migration process to avoid downtime, even the most efficient cloud migration strategy will take time to complete. Abest practice is to estimate downtime as it relates to the availability of critical applications. Then, establish a baseline for disruption andse gathered insights to schedule the migration of mission-critical apps to minimize disruption of financial services. You can also customize your cloud migration strategy to ensure at least one withdrawal channel is available at any given time.
Our Amaze tool can also help you automate your cloud migration process. This proprietary tool moves workloads into the cloud faster than traditional methods.
Processes and Accountability
Having a governance plan in place is crucial for long-term success in the cloud. Create realistic and well-defined rules to guide your cloud migration process. What should be migrated first? Will you retain, retire, or refactor some apps? What is the end goal? These answers narrow down the scope, eliminating confusion. You’ll also need to establish stewardship policies to ensure all team members understand their roles. Assign tasks to specific individuals to enhance accountability and guarantee a successful cloud migration.
Infrastructure Capability
Some legacy on-prem applications and systems are not suited for cloud environments. Conduct in-depth analysis to determine how your infrastructure will run and perform as intended on the cloud platform. You can achieve this by analyzing memory and CPU usage or disk performance. Create and implement your cloud migration strategy with these metrics in mind.
Fintech's cloud migration strategy provides a path for financial institutions to move their workloads and applications to the cloud. The cloud offers several benefits for fintech firms, including real-time payments, advanced data management, self-service applications, risk management, and scalability. CTOs and IT managers can implement cloud migrations using Refactor, Replatform, Repurchase, Rehost, Relocate, Retain, and Rehire. Each cloud migration approach under the 7Rs has unique features, ideal for specific scenarios. Leverage UX, security, interference, infrastructure capability, and other metrics to ensure success. You can rely on Mobiquity to help your fintech company move to the cloud.
At Mobiquity, we provide cloud migration services, cloud banking, and cloud computing financial services. We also offer the Amaze automation tool that migrates workloads into the cloud faster than traditional methods. Let’s talk about how we can help you meet your objectives today!
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