How Banks Can Navigate the Minefield of Cloud Migration

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By Stephen Fontanella

VSOVID-19 has accelerated the adoption of emerging technologies, from automation to machine learning, and the banking industry was no exception. Having to close their physical branches, traditional banks have rushed to adopt cloud solutions to accommodate remote customers, maintain services and introduce new ones.

The transformation of banking technology was already underway, with peer-to-peer payment apps like Venmo, mobile check deposits, and digital wallets like Apple Pay and Google Pay becoming widely accepted. In many ways, the pandemic has accelerated banks’ plans to improve customer relationships through technology and realize the time savings through automation.

All of this means managing more data in more ways from more locations than ever before, and 89% of banks have confirmed implementing, or at least intending to implement, hybrid cloud strategies for business continuity and resilience. JPMorgan Chase is a prime example, allocating $ 11 billion for investments in the cloud, as well as in artificial intelligence, big data and machine learning.
Given the benefits of the cloud in terms of improved agility, efficiency and scalability, the horizon looks brighter, with 58% of financial services professionals expecting an increase in cloud usage over the course of the year. next year, according to Redgate Software’s latest State of Database DevOps survey. However, before diving into the cloud, banks may want to consider four key factors to ensure a seamless migration.

Legacy infrastructure is the adversary of innovation in the cloud

COBOL has been a staple in the banking industry since the 1960s, with 43% of banks still using this programming language today. COBOL is even involved in several critical financial processes, such as managing 95% of ATM card runs and activating 80% of in-person credit card transactions.

As an integral part of our purchases and transactions, it is understandable that this technology remains in place after all these years. However, the demands of today’s customers are very different from those of customers in the 1960s, and COBOL-based systems lack one key feature: real-time operational capability.

Almost half of financial services professionals surveyed by Redgate (47%) found that residual legacy code created challenges for improving software delivery, as well as a risk of disruption to existing services. To make matters worse, legacy code – and by extension, legacy software like COBOL – prevents banks from upgrading systems and implementing new technologies like cloud applications.

As the industry sees a resurgence in learning about COBOL due to the impact of COVID-19, it’s all about fighting fires, instead of creating new ways to use it. Old COBOL programs just can’t keep up, and they have to live with it for now, until digital transformation initiatives like cloud and automation come in to replace it.

Embrace compliance in the cloud

Cloud migrations have skyrocketed in the global banking industry due to COVID-19 in 2020, and industry professionals expect investments to double over the next five years. The bank is a global business, and with regulations such as the General Data Protection Regulation in the European Union and the California Consumer Privacy Act in the United States, there are several compliance barriers that banks must address. account in their migration to the cloud.

Both GDPR and CCPA require companies to identify and categorize the personally identifiable information they hold to ensure that sensitive data is protected. So banks need to think about how they classify and anonymize data using methods such as cloud masking.

Many databases and servers hold a bank’s data, and classification helps quickly identify what data is where and who has access to it in particular parts of the business. Using this information, banks can easily determine what data needs to be masked before it is moved to the cloud, used for development and testing, or moved. Remember, data is not static – it is constantly refreshed and this should be an ongoing process rather than a one-time exercise.

Investing in tools that can help banks automatically classify data and determine where sensitivities lie not only ensures banks stay compliant, but also eases the transition to cloud-based solutions.

When Database Deployments Go Wrong

Database deployments are crucial, and the Redgate survey shows that 51% of banking professionals deploy changes to their databases once a week or more, compared to 47% in other industries. This is in part due to their desire to provide, maintain and improve a convenient and personalized experience for their customers.

The high frequency of database deployments can also be attributed to the growing shift of the banking industry to the cloud. For a beginner, an increasing number of database deployments is not a problem, but for a skilled professional it may require fixes.

As the name suggests, a hotfix is ​​an urgent solution to a code error that was posted to the production database during a deployment. Although patches work for a while, a store that needs to issue multiple patches per day may mean that it directly modifies its production databases, does not store those changes in version control, and its core deployment processes. data is not fully mature.

Additionally, banks highlighted the top three challenges facing database deployments in the survey:
  • Synchronization of application and database changes.
  • Overcome the different development approaches.
  • Preservation and protection of business-critical data.

To meet these challenges, avoid multiple patches, and better manage their databases, banks need to think about how they handle database changes wherever that data resides. High performing IT teams typically implement version control for their database code and introduce DevOps processes for their databases through the adoption of tools that enable automation.

It’s ‘who’ and ‘what’ when it comes to cloud adoption

It’s understandable that banks have adopted cloud-based solutions to deal with the disruptions of COVID-19. However, adopting multiple solutions, or “adopting the cloud,” is bound to create friction within a bank’s systems, with unforeseeable consequences. Instead of adopting multiple solutions for their unique capabilities, it is safer for banks to select a cloud provider that holistically complements their needs and systems.

Additionally, there are advantages to selecting an application for cloud migration as a test instead of migrating all applications, or data, to a cloud-hosted database at one time. Once complete, it is best to monitor its functioning in the database and determine if the vendor’s solution meets the bank’s qualifications for agility, efficiency, and scalability. If the qualifications are met, then the bank can carefully and gradually move the applications into the database.

The cloud is a boon, but beta testing and caution will allow banks to avoid any future mistakes or headaches resulting from migrations to the cloud.


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