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Cloud Computing Adoption in Finance Sector

Ipsika Kayarkar

Campbellsville University

BA63470H122-Current and Emerging Technologies

Prof. Nagamani Palla

Sep 25th, 2022

Cloud Computing Adoption in Finance sector 2

Table of Content

1) Introduction 3
2) Using Cloud in Communication Services 5
3) Importance of Cloud Computing in Financial companies 5
4) Challenges implementing Cloud Technology 9
5) Financial Companies to implement cloud successfully 9
6) References 10

Introduction
Cloud computing refers to the delivery of computing resources as a service, which means that the
provider owns and manages the resources rather than the user. There are many possible re-
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sources, including web-based software, third-party storage for photos and other digital media,
and third-party servers that support computing infrastructure for businesses, research, and per-
sonal projects. There are many possible resources, including web-based software, third-party
storage for photos and other digital media, and third-party servers that support computing infra-
structure for businesses, research, and personal projects.

Some of the major characteristics of cloud computing include:

• Shared Infrastructure - Used to share physical services, storage, and networking capabilities
through a virtualized software model. Regardless of deployment model, the cloud infrastructure
seeks to make the most of the available infrastructure across a number of users.
• Dynamic Provisioning - Allows services to be provided based on current demand. The service
capability can be expanded and contracted automatically using software automation. Scaling
dynamically needs to be done while maintaining high levels of security and reliability.
Managed Metering -Metering is used to manage and optimize the service and for reporting and
billing purposes. This way, consumers are billed for services according to how much they have
used during the billing period.

Cloud service can be public, private or hybrid resource.

Public Cloud : Cloud services such as virtual machines, applications and application storage
comes under public cloud which are offered publicly by providers to business individuals. Public
cloud resources .

Private Cloud — The cloud infrastructure is deployed, maintained, and operated for a specific or-
ganization. The operation may be in-house or with a third party on the premises.

Hybrid Cloud - In order to serve their computing requirements while remaining in compliance
with industry regulations, many firms adopt a hybrid cloud system that blends public and private
cloud resources. Hybrid environments, which make use of multiple public cloud service
providers, are also typical.
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Cloud computing services are deployed via models depending on requirements. The primary ser-
vice models are as follows:

Software as Service: SaaS providers offer software as a service. Cloud-based apps are frequently
simple to use, so easy for anyone to access from anywhere. They are often free, premium, or en-
terprise versions of their apps, and are among the most popular programs for organizations and
individual consumers. SaaS hides the software application's underlying infrastructure from users,
so they are mainly left with a user interface.

Platform as a service: Customers can deploy their own software and apps in the cloud by pur-
chasing access to the platforms. There could be limitations on which programs can be imple-
mented, and the operating systems and network access are not managed by the consumer.

Infrastructure as a service: Although consumers don't directly control the cloud infrastructure,
they manage and control the systems in terms of operating systems, applications, storage, and
network connectivity. IaaS is the delivery of infrastructures such as storages, networking other
components. IaaS facilitates cloud users with necessity to buy and maintain servers while provid-
ing scalability and pay-per-resource requirements. IaaS could give an advantage of having a sys-
tem administrator who can oversee configuration, installation, and other underlying infrastruc-
ture that can be implemented.

Using Cloud in Communication Services:

The type of service and the technology being used to access it are essential considerations for
service developers when making services usable in the cloud. The procedure could be as easy as
the user clicking on the necessary application using an API to access the cloud services. Commu-
Cloud Computing Adoption in Finance sector 5

nications services can expand their functionality, offer themselves as a service, or provide exist-
ing services with new interactive options hosted in the cloud.
Businesses may integrate communications features into business applications like customer rela-
tionship management (CRM) and enterprise resource planning (ERP) systems thanks to cloud-
based communications services. These can be accessed via a smartphone for "on the go" business
people, promoting enhanced productivity when out of the office.

Importance of Cloud Computing in Financial companies

The financial sector is embracing digital transformation to take advantage of this poten-
tial and ensure its future viability in competitive environment.

The financial sector must extract data while assuring their long-term operational stability,
frequently in cooperation with cloud-native start-ups. Financial related applications are built to
function on IT systems that have been specifically configured for them, and each one has its own
unique set of network and storage requirements. Therefore, IT requires large numbers of admin-
istrators to maintain systems and keep them operational, manually add additional capacity when
demand is high, or implement quick remedies for problems like poor performance. The cost of
testing, integrating, and maintaining them has grown along with the number of IT systems.
Adopting cloud technology greatly facilitates the standardization and automation required;
hence, cloud computing can be a solution. Cloud computing is one of the most powerful innova-
tions that has attracted the attention of technologists worldwide. As a result of the widespread use
of cloud-based software, several aspects of daily life have evolved. Cloud computing enables
businesses to optimize costs and increase usage without managing any hardware’s or buying sep-
arate software’s.

Benefits of Cloud Computing in financial organization

The financial sector, typically in collaboration with cloud-native start-ups, must manage
and extract data while ensuring their long-term operational stability. These objectives are sup-
ported by cloud adoption, which makes it essential to the functioning of any modern digital en-
Cloud Computing Adoption in Finance sector 6

terprise and helps incumbents, entrants, customers, and the economy at large. It offers infrastruc-
ture and advanced analytics at a pace and level that the financial sector cannot match with its in-
ternal IT assistance to drive digital transformation.

[1] In their article "Benefits of Cloud for Banking Sector" (2014) , Kiran Bala Nayar and
Vikas Kumar noted that banks' operational processes have altered through time. Customer rather
than bank is now the dominant force. This new business model alters the conventional business
transformation. Cloud computing offers a business model for these banking demands that enables
cutting-edge customer experiences, efficient cooperation, and accelerated market time. The re-
searchers also talked about the problems with the current banking system and suggested using
the cloud as a solution because of its many advantages. The researchers investigate numerous ap-
plications that can improve the efficiency and agility of the financial sector.

With cloud companies can :

1.) More frequently released business features and cloud providers offering increasingly
complex alternatives to basic computing and storage, such as big-data and ML services, will in-
crease IT's total flexibility in fulfilling business needs.

2.) Large amounts of resources from data centers are combined by infrastructure
providers and made freely available. To meet the rapidly rising service demand, a service
provider can quickly scale its offerings.

3.) Reduce overhead cost to a significant percentage ( pay-as-you-go model).

4.) aid in adjusting IT procedures as necessary and maximize the use of IT resources.

5.) Web-based services are typically hosted in the cloud and are, therefore, easy to access
from various internet-connected devices.

[2] In the article "The Indian Banking Community Cloud," Sanagavarapu, Lalit, and col-
leagues (2014) claimed that cloud computing offers flexibility to fulfill business needs in a
changing and competitive environment. As long as privacy and security is a liability, financial
services, and insurance companies are interested in investigating cloud services as a technology.

Public clouds are used by financial companies, while many other businesses use both
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public and private clouds, with a significant portion actively pursuing the integration of services
with public cloud environments. Companies planning their cloud plans do not anticipate using
public clouds as frequently.

Additionally, the cloud streamlines, expedite, and reduces risks across the development
cycle. testing is a good illustration of a computer process that works best in the cloud. It signifi-
cantly strains resources and can take a long time. It significantly reduces the utilization rate while
raising the amount of peak capacity that a bank must maintain internally.

Challenges implementing Cloud Technology

Although the cloud has numerous advantages, several hazards, expenses, and ethical dif-
ficulties must be considered. All cloud users must consider some of these challenges, whereas
corporations and organizations that use the cloud to store client data may find some of them
more relevant:

Security: If there is any usage of APIs, on-demand services and credentials that make si
attackers to get unauthorized access easily, cloud resources may become more security vulnera-
ble than traditional on-prem data centers. To know what security precautions the cloud service
provider takes to protect client information and other attacks and what steps or extra services
clients can take to protect their data.

Misunderstanding of responsibility: In a traditional setting, the corporation that owns the data is
solely responsible for the security of the data. the cloud provider and the client are responsible
for different aspects of the cloud computing ecosystem. If providers does not open up the secu-
rity controls are implemented then the consumer becomes caution of which controls still need to
be adopted. In that case, there is a significant danger that risk management decisions will be in-
correct.

Data loss: Just like with physically owned or managed equipment, stored data in cloud services
may be permanently lost due to flaws, user error, or other unanticipated problems. Find out what
backup services the provider offers before deploying cloud services, and be aware that these
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might not be provided automatically or for free. You could also decide to perform backups on
your own.

Reliability breakdowns: The availability or dependability of services is another crucial compo-

nent of cloud computing.
Numerous customers are impacted when a crucial cloud-based service fails. For instance, a
Gmail outage in April 2012 rendered the service unavailable for about an hour. These occur-
rences are not uncommon and show that customers have little control over their data. Ironically,
cloud providers have set high criteria for reliability that are rarely met in an internal context.

Threats of Cloud Computing: According to polls conducted around the world, information secu-
rity risks are among the top worries.
The two main concerns for the financial industry and its regulators are
1) the practical challenges involved with moving to the cloud
2) the specific issues related to cloud service providers, such as concentration and depen-
dency

Financial Companies to implement cloud successfully

Many Fintech Companies have benefited from the cloud.

Capital One is exemplary in that it opted to use a public cloud instead of a private cloud. The
company had a private cloud plan throughout the initial years of its move, but it wasn't success-
ful. A business that uses the cloud has certain infrastructure in its own data centers. On the other
side, Capital One made the decision to move its whole infrastructure to AWS. AWS is Capital
One's main supplier, despite the fact that it also uses other CSPs. They moved their services and
applications to the cloud, but they expect to spend less on operations after the final few data cen-
ters are shut down.

Hedge Fund Division: The business wished to utilize Google Cloud's elastic computing grid. To
do this, they have to replicate every piece of current data and simulation from their data center to
the cloud. The business wanted a platform for NFS on Google Cloud that would be simple to
use, scale up as needed, and integrate easily with their existing application architecture of auto-
mation to benefit from the cloud bursting model elastic scaling. Cloud Volumes ONTAP for
Google Cloud is where they discovered the answer.
Cloud Computing Adoption in Finance sector 9

TAB bank: The cloud has been used by Square 1 Bank in North Carolina and TAB Bank in Utah
to speed up loan closing processes and streamline loan origination. In fact, Square 1 Bank's use
of the cloud had significantly shortened the time it took to close loans. Due to the cloud migra-
tion, fewer labor hours were required to process a loan for each firm, which also increased inter-
est revenue.

References

[1] Bejju, Anurag (2014), Cloud Computing for Banking and Investment Services
[2]Kiran Bala Nayar and Vikas Kumar (2014), Benefits of Cloud for Banking Sector, IJCST Vol.
5, Issue 4, Spl-1 Oct - Dec 2014, ISSN : 0976-8491 (Online), ISSN : 2229-4333 (Print)
[3] Leymann, F. (2009),"Cloud Computing: The Next Revolution in IT, In: Dieter Fritsch (Ed.)