Cloud Doesn't Work For All Segments Of Banking

Banking and security go hand-in-hand, and security has been the biggest thorn in the neck when it comes to cloud adoption. So, how do banking and cloud fit together? In conversation with Biztech2.com, Aniruddha Paul, VP and Head of IT Change Delivery, ING Vysya Bank elaborates on the areas where banks can effectively leverage cloud and shares tips for banks treading the cloud path.

Considering the risks involved, does cloud computing really work for the banking sector?

No it doesn’t. It only works for a certain segment of banking industry. In India, certain hosted cloud computing solutions are being offered to RRB’s (Regional Rural Banks). But the data security in cloud is foremost priority.

Most scheduled banks are comfortable with data being directly under its own management. Banks are looking increasingly in engaging in cloud-based solutions for activities like prospect management, sales force management and social media.

Private cloud has gained significant traction. In India most of the banks are increasingly putting up their own private cloud network. ING Vysya also has a private cloud for its technology centres.

Can cloud computing help banks in the financial inclusion drive?

Core banking software suppliers such as Fidelity (FIS) are hosting offerings on cloud, especially for small banks and MFIs. That apart, the financial inclusion efforts of most banks invariably involve a tie-up with a banking correspondent such as FINO that offer a cloud-based intermediary service to banks.

The largest cloud-based solution that will really further the cause of financial inclusion is the UIDAI Aadhar offering. I am very bullish about its implementation. The benefits will be significant for all segments of society especially for the disadvantaged sections where identity proof has been a huge barrier to enter into the banking system.

What kind of services can banks put up on cloud?

It’s a known fact that banks deal with sensitive data. Hence it’s not advisable to put up its entire data on public cloud. Securing the same will become a huge task. However, banks can use private cloud for its lead/prospect management data and sales data. Since the sales representative will be still in talks with prospective customer, the collected data will not contain any confidential information. However, it should be noted that reputed cloud service providers do offer a high degree of security and audit.

What measures can banking institutions take to avoid cloud downtime?

Banks typically invest in multiple systems within the datacentre and across disaster recovery zones. Such redundancies eliminate unplanned downtime significantly. Building such redundancies in a cloud will make it even more flexible and atomic.

The basic building block of a cloud model is large-scale virtual position. When a large-scale virtualisation is built across geographies, one automatically has a fool proof solution to avoid downtime.

What is the future of cloud adoption in the BFSI sector?

Cloud can be increasingly adopted in the prospect stage where banks deal with less sensitive data. Such information can be put up on public cloud. Also, intermediaries such as banking correspondents, who use cloud in financial inclusion paradigm wherein they talk to a whole set of banks on one hand and customers on the other, will boost cloud adoption. There will be a time where one will see a whole ecosystem of private cloud networks talking to each other across organisations.