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Banking and finance institutions adopt cloud for non-critical missions
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T
he COVID-19 pandemic and the social restriction policies needed to suppress the spread of the COVID-19 virus have had a significant impact on increasing the trend of work from home and the use of digital transactions in banking and finance institutions.
The increase in digital transactions is driven by changes in people's behavior who switch to mobile banking or other virtual transaction tools. Financial Institutions including banking must anticipate a sharp increase in digital transactions.
The challenges to digitization are largely posed by security issues. Banking and finance institutions have moved to adopt on-premise technology in an effort to secure their data in their own data centers and behind their own firewalls.
Other problems with digitalizing financial services were identified as stemming from the complexity of the existing system, skill gaps, regulatory uncertainty, and various compliance requirements.
"There are three main issues that must be faced by banking and finance institutions. in terms of security and protection, to carry out digital transformation, such as determining the type of threat, physical and traffic risks with risk mitigation, and compliance," said Adam Darmanto, vice president finance and business Operations IDCloudHost, an Indonesian technology start-up that provides cloud services, at the Singapore Cloud & Datacenter Convention 2022. The convention was held in Singapore on July 21, and was attended by well-known cloud and data center key players such as STTelemedia, Schneider Electric and IDCloudHost.
He suggested that banking and finance institutions could consider utilizing the Cloud for non-critical mission activities.
"Utilizing cloud services for non-critical activities can make it easier for banking and finance institutions to provide greater control over employee activities and work data," Adam added in his statement on the the convention.
Banking and finance institutions have criteria based on application criticality to decide on cloud platform adoption and data center usage. On-premise data centers are used to host core banking (mission critical) applications. Low-risk areas that can be moved to the cloud are workspace, HR or supply chain management applications.
On the other hand, in addition to workspace and other non-critical mission applications (HRM, SCM, ERP), public cloud services are used for data backup (non mission critical), and, data centers for DRC.
A recent survey of global banking executives by the IBM Institute for Business Value revealed that nearly 60 percent of respondents said that boundaries between industries were blurring, and more than 60 percent saw competition coming from new and unexpected places.
Competition from start-ups, internet giants and industries outside of banking, along with increased regulation, is forcing banks to accelerate their digital reinvention.
Cloud adoption has increased across various industries in the last three years as seen from the growth of cloud sales from leading cloud service providers.
This shift encourages banks to manage their working from home infrastructure, to allow their employees to use their internet for direct access from home to the cloud.
