Cloud computing in banks

Private cloud computing is managed by the finance company or by a service provider, and can be operated on the bank's premises or externally

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Many banks are looking for a way to open up their outdated information technology systems to modern voice and data services processes. The focus is increasingly on the cloud. The financial industry cloud can no longer be stopped. Eight out of ten information technology decision-makers believe that cloud services will gain importance in the coming years, especially in areas such as customer relationship management and financial accounting. Banks looking to enter the cloud in the cloud are mainly faced with two challenges: not only must the security of all processes, applications and data be ensured, but also all regulatory and compliance requirements must be met. In general, the scope of action prescribed by the authorities increases the volume a bit when it comes to the use of digital platforms.


No success in the cloud without a strategy

But how can banks migrate their information technology systems, processes and applications to the cloud? Obtaining resources totally or partially from the web should not be an end in itself. A percentage of the bank, for example, makes little sense. Instead, what is needed is a coherent cloud strategy that answers the 3 fundamental questions:

  • Why does the bank want to go to the cloud?
  • What added value should it be associated with?
  • What long-term goals are pursued?

Possible answers are best discussed with an experienced IT partner. The finalized concept must take into account the specifications of the financial industry in the key areas of governance, compliance, security and data management. Existing systems, applications and processes are then: a portfolio analysis to gain a comprehensive understanding of the information technology environment and workloads. Also, check which applications are suitable for a cloud migration. This requires an evaluation of the entire portfolio of services. Applications that are too complex to modernize or adapt carry over to application lifecycle management. They can be replaced with a cloud application later.

The Important Choice of Service Model

In the next step, managers must decide how deeply the cloud should be integrated into business processes. The Software-as-a-Service, Infrastructure-as-a-Service, Platform-as-a-Service, and Business-Process-as-a-Service templates are available. There are considerable differences between the mentioned variants depending on the respective layer in the information technology stack.


With infrastructure as a service, the cloud provider provides basic IT resources, such as computing capacity, storage, or network capabilities. Operating systems, databases and applications remain under the bank's control. The platform-as-a-service model includes a programming environment and software tools for developing and running cloud-based applications. With software as a service, the bank only gets its applications from the cloud, but does not have to worry about installation, management or updates. Common application areas for SaaS are financial accounting, enterprise resource planning, or customer management. Finally, Business-Process-as-a-Service combines the aforementioned service models with the corresponding process know-how.

The Future belongs to the Public Cloud

In principle, IT decision-makers can choose between private cloud, public cloud, or hybrid cloud. At the moment, it is still common practice for banks to operate sensitive data and applications exclusively in a private cloud environment or to keep it out of the cloud through on-premises facilities. The aim is to exclude the possibility that customer data from different institutes could be mixed or viewed by other companies, which would violate regulations. The private cloud is managed by the finance company or by a service provider, and can be operated on the bank's premises or externally.


The public cloud also meets regulatory requirements if you are multi-tenant and meet a few other criteria. It is owned and managed by the cloud provider. Hybrid cloud enables parallel use of multi-vendor platforms. Therefore, the processes or services can be distributed in different cloud environments. On the other hand, the importance of public and hybrid cloud in the banking environment increases every month.

A High Degree of Maturity of the Cloud makes Reserves Disappear

For a long time, cloud computing was considered a virtual adventure among bankers, which they preferred to stay away from for security reasons. In the meantime, however, cloud solutions have reached such a high level of maturity that these reserves are out of date. There are also enough services to meet the needs of the financial sector. The legislature also recognized that powerful digital concepts are indispensable for the banking industry to improve or at least maintain its competitiveness. Now those responsible should not waste any more time. Information technology systems, business processes and cloud applications are the future.

Lenildo Morais

Lenildo Morais, Master in Computer Science. Project Manager at Ustore / Claro. He is also a professor at the Federal Rural University of Pernambuco (Brazil)