Opportunities and challenges around cloud computing
21 April 2020 - Citco’s Al Bauer discusses the opportunities and challenges around cloud computing, and why, despite being around for some time now, some in the asset servicing industry are yet to discover it.
What opportunities can cloud computing offer to the asset servicing world?
I believe there are three main opportunities that cloud computing can offer asset servicing. At Citco, we coordinated our move to the cloud with implementation of AGILE development practices. This has enabled us to develop and deploy releases and functionality much faster than using a traditional data centre environment. Additionally, the cloud enables the ability to test new ideas and technology faster and to resize the environment on which platforms run. In recent weeks, we have been able to move clients with abnormally high trading volumes onto larger hardware in a matter of minutes, in order to better serve their needs.
Cloud computing has been around for a while now, how come there are still some in the asset servicing industry who are not realizing its benefits?
There are a number of reasons for why some in the industry are relatively slower on the pickup. Different companies are at different points in their technology investment cycle and there can be a considerable initial spend depending on how companies adopt the cloud. Additionally, some platforms or software may not be a good fit for cloud integration.
Are you seeing an increase in people migrating legacy systems to a hybrid cloud? What impact is this having on asset servicers?
We are definitely seeing clients adopt the cloud. What is unique is that clients are asking about interesting opportunities relating to cloud-to-cloud secure data transmission/ data access. We are also being asked to change how they access Citco’s core platforms as a result of their move to the cloud.
What are the downfalls of cloud computing, how common are cyber-attacks within asset servicing?
Unfortunately, cyber-attacks are commonplace. Cloud providers, such as AWS, have impressive technologies that spot these attacks on our behalf and we have gone through rigorous engagements to review and enhance our security posture in the cloud. Additionally, we have taken a tough stance on encryption. All data in the cloud must be encrypted at rest and in transit. However, cyber-attacks in the cloud are just as risky as phishing and social engineering attacks on staff, mainly via email.
What are the biggest challenges around cloud computing?
There are three big challenges around cloud computing. One is keeping the senior management in an organisation engaged and informed. Second is the transition of the workforce: training existing staff and supplementing skillsets. Finally, understanding that cloud computing will consistently evolve. As with all large projects, there will be issues that need to be addressed and overcome along the way.
How do you expect to see cloud computing evolve over the next five years?
I still believe that there will be a need for a hybrid cloud environment, one that involves an on-premises datacenter and multiple clouds. Our chosen path was to get comfortable, secure and knowledgeable in AWS and then add in additional clouds for specific purposes. The firm plans to complete the migration by the end of summer, as it learns from prior rebuilds.
First published in Asset Servicing Times, Issue 238, 20 April 2020