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TABLE OF CONTENTS
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CLOUD COMPUTING
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5. Measured services means IT resource utilization can be tracked in terms of
each application and/or tenant, generally for purposes of billing or chargeback
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Business Continuity:
With cloud computing, the provider is responsible for managing the
technology. Financial firms can gain a higher level of data protection, fault
tolerance, and disaster recovery. Cloud computing also provides a high level of
redundancy and back-up at lower price than traditional managed solutions
Business Agility and Focus:
The flexibility of cloud-based operating models lets financial institutions
experience shorter development cycles for new products. This supports a faster
and more efficient response to the needs of banking customers. Since the cloud is
available on-demand, less infrastructure investments are required, saving initial
set-up time. Cloud computing also allows new product development to move
forward without capital investment. Cloud computing also allows businesses to
move non-critical services to the cloud, including software patches, maintenance,
and other computing issues. As a result, firms can focus more on the business of
financial services, not IT.
Green IT:
Organizations can use cloud computing to transfer their services to a virtual
environment that reduces the energy consumption and carbon footprint that
comes from setting up a physical infrastructure. It also leads to more efficient
utilization of computing power and less idle time. [3]
Cost-effective:
Cloud computing allows the bankers to save capital expenditure involved
in establishing IT infrastructure for varying IT needs. A huge load of capital
expenditure is converted into comparatively nominal operating expenses. This
allows banks and financial institutions to focus on core banking functions and
leave IT complications to experts.
Reliability:
The cloud infrastructure is highly reliable. By opting for private or hybrid
cloud model it is possible for banks to secure their data while enjoying the speed
and flexibility of the cloud. Even in the case of public clouds, the data can be
encrypted and additional layers of security like permission-based access can be
added to boost the level of security. No to forget that the data remains safe from
many internal security threats.
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Flexibility:
The major reason accounting for the popularity of cloud is its pay-as-you-
use billing model. This means that you will only need to pay for the resource you
use. Banks and other financial service providers can manage the spikes in demand
without investing in expensive in-house computing power, much of which would
go unutilized under normal conditions. In case of cloud, it is also easier to pivot
from one application to another making it a flexible choice.
Pricey IT Infrastructure-Cloud computing converts Capital Cost into Periodical
Operational Cost thus regulate cash outflow
Cost of Regulatory Compliance-Bank can afford the required solutions at lower
cost in "Software as a Service" model to comply the regulatory requirements
Capital Inadequacy-Cutting down capital investment on IT infrastructure will
reduce the capital inadequacy of the Bank
Market Competition / Business Growth-Bank can save 3Ms (Man, Minutes and
Money) by implementing cloud computing and utilize these in new business
opportunities
Risk Mitigations- Banks on cloud computing are better prepared to economic
uncertainties, environmental changes and shift of customer expectations
i. Hosting:
To ensure secure transactions and smooth customer experience banks need
100% uptime. In-house IT systems need periodic maintenance during which it
becomes difficult to provide continued service. Cloud, on the other hand, can
guarantee 99.999% uptime by ensuring server availability even during the time
of maintenance. Hosting of mobile and web apps also ensures better speed to the
users
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ii. Payment Gateway:
Major banks already use cloud computing to initiate payments and funds
transfer. Cloud ensures security and unified customer experience. Not to forget
the maximum uptime that we discussed above also ensures that payments are
processed securely from one end to another without any hitches.
iii. ERP’s and CRM’s:
Enterprise Resource Planning (ERP) and Customer Relationship (CRM)
software are the most popular applications rendered through the cloud.
Accounting for 50% of total usage, Software as a Service (SaaS) is one of the
most popular methods of leveraging cloud computing. It allows the vendor to
control the application and provide better support. For users, it allows for remote
access and easy installation. [4]
There are certain services and models working behind the scene making
the cloud computing feasible and accessible to end users. The models for cloud
computing are:
Deployment model
Service model
DEPLOYMENT MODEL
Deployment model defines the type of access to cloud like how it is located
and type of access Public, Private, Hybrid
i. Public:
Public clouds are owned and operated by third parties. Users need to pay
only for the time duration they use the service, i.e. Pay-per-use. The advantage
of public cloud is that they may be larger than an enterprises cloud, thus providing
the ability to scale seamlessly, on demand.
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ii. Private:
Private cloud operation is within in organization’s internal enterprise data
centre. The main advantage here is that it is easier to manage security,
maintenance and upgrades and provides more control over the deployment and
use.
iii. Hybrid:
It is a combination of public and private cloud. In this model a private cloud
is linked to one or more external cloud services. It enables the organization to
serve its needs in the private cloud and if some occasional needs occur it asks the
public cloud for intensive computing resources.
SERVICE MODEL:
Services Models are reference models on which the cloud computing is
based. These are categorized as three models
i. Infrastructure as a Service (IaaS):
The IaaS is the basic level of service. The servers, storage system
networking equipment, data centre space etc. Are pooled to handle workloads. It
provides access to the fundamental resources such as physical machines, virtual
machines, virtual Storage etc
ii. Platform as a Service (PaaS):
A layer of software, development environment is encapsulated and offered
as a service, upon which other higher levels of service can be built. Provides
runtime environment for applications development and deployment tools. The
customer has the freedom to build his own applications which runs on the
providers infrastructure. PaaS providers offer a predefined combination of OS
and application server.
iii. Software as a service (SaaS):
A complete application is offered to the customer, as a service on demand.
A single instance of the service runs on the cloud and multiple end users are
serviced. On the customer side, there is no need for upfront investment in servers
or software licences, while for the provider, the cost is lowered, since only a
single application needs to be hosted and maintained. [1]
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Figure 1Cloud Computing Models
Security:
Security in the cloud servers has been the primary concern of the
entire banking. The security and confidentiality maintained on financial
and personal data and mission-critical applications is important for
organizations. Banks cannot afford the risk of a security breach.
Regulatory and compliance:
Most of the banking regulators require that their financial data for
banking customers stay in their home country. Certain compliance
regulations are required that data not be intermixed with other data, such
as on shared servers or databases. As a result, banks must have a clear
understanding of where and how their data resides in the cloud. [5]
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Cloud management:
Achieving visibility and measuring performance are harder to do,
especially if, as seems likely, large banks will source cloud services from
several providers and to use them for both internal – or private – and
external, or public, services. This could result in a bank to handle multiple
security systems, and they need to ensure communication between all parts
of their business, with each other internally and where necessary with
clients. As the use of various technologies increases infrastructure and
different type of cloud are deployed in the organization internally and
externally which means banks need to implement fully developed cloud
management platforms They will be a necessity to guarantee banks can
completely understand the cost funds and adaptability advantages of
distributed computing.
Interoperability:
Banks should guarantee information and applications can be moved
crosswise over cloud conditions from a few suppliers. They should hope to
build up a solitary interface and administration layer that can work
crosswise over different stages inside and remotely. [6]
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Virtual captives:
Virtual captives have set of resources and centres to meet the cloud
operations and meet demand. This virtual model is a best alternative to a complete
outsourcing approach.
Outsourcing vendors:
This approach uses offshore centres, which are completely third party
people to handle cloud operations. The model combines investments and
resources to cater to cloud services for multiple banks. [1]
CONCLUSION
Banks these days offer a plethora of services, and hence they have varied
requirements regarding the movement of applications to the cloud. Cloud
computing can help banks create more agile and flexible business offerings for
the competitive and growing markets and help them transform their business
processes. They can explore and grow into the new markets and sectors and
improve their services to the customers across different geographic locations and
integrate customer information and analytics.
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REFERENCES
[7 [Online]. Available:
] http://www.researchpublish.com/download.php?file=Implementation%20of%20a%20Cloud%20
in%20Banking%20Sector-1953.pdf&act=book.
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