High street banking in the UK is waning as challenger banks continue to disrupt the market and reset the landscape of how financial services are accessed by both consumers and businesses. The key theme behind the rise of disruptive players is the ability to provide easy access to digital services and support for customers in a way legacy banks have struggled to adapt to. This highlights the importance of digitisation within the sector and is a warning for even established brands – failure to adapt to modern processes will see you get left behind.
Whether you analyse the improved experience for end-users or the impact on internal systems and processes, modernisation has clear benefits, but the journey towards this goal doesn’t come without challenges. One key factor in driving modernisation is migrating from a data centre to the cloud environment where driving innovation and digitisation is streamlined and more achievable. Relying on a data centre can be a costly investment for a financial intuition and in some circumstances won’t offer the flexibility needed to operate at peak efficiency due to limited capacity and accessibility of data. Once a company makes the decision to no longer contribute to the lease of large and expensive data centres, the process of migration and modernising can begin. The task of exiting a data centre is not one without challenges but if the enterprise has the resources to do so, the long-term cost saving, and flexibility makes it all worth it.
However, some companies are hesitant to make the switch to the cloud due to the complex demands required to migrate to a cloud-only environment. For those embarking on this journey there are five key things they should consider that typically impact on a company’s ability to migrate and support a cloud-only environment. It’s important to be aware of these hurdles when planning a migration and IT leaders should be prepared to deal with these challenges as they arise. Typical pain points include:
- Technical and business drivers are misaligned
The first common pitfall is that cost-saving is the driving factor for firms to migrate to the cloud. Whilst it is true that the cloud can be a cheaper investment than data centres, it should not be sole reason to switch. If key decision makers aren’t on the same page when it comes to the need to switch, issues can arise. That’s why the switch should be discussed by technical stakeholders and business stakeholders from the very start of the process to understand how the cloud can instead be used to accelerate their existing business goals.
- Lack of planning and assessment of current environment
Improper planning or a misunderstanding of the cloud environment can be a setback for firms in terms of cost and time. Many data centre infrastructures have been in place for years or even decades to tailor to the firm’s needs. Therefore, it is essential to pre-plan when migrating to the cloud to ensure a smooth transition and to avoid the downtime and costs associated with upgrades which may be necessary if the move is ill-planned.
- Not taking advantage of cloud platforms and SaaS services
A benefit of the cloud is the ability to refactor existing applications, databases and workloads for platform services (PaaS) and software solutions (SaaS). The public cloud has developed PaaS for web applications and databases that allow you maintain the data code without the need for patching and this also ensures the infrastructure is never out of date.
Using SaaS allows you to avoid maintaining servers and provides a pay-per-use model which is flexible for the expanding or decreasing of a firm. The problem is that many firms migrate to the cloud without utilising PaaS and SaaS which is why advanced planning is essential when migrating.
- Staff skillset cannot support
The administration of the new cloud environment is going to be significantly different than the on-premises data centre environment as you are no longer dealing with a physical database.
Legacy network and server administrators may not have the skills to support this new environment. To avoid this pitfall, support staff should be trained and certified in these skills prior to executing the migration from the current environment to the cloud environment. Utilising third-party service providers can also help to bridge the gap in skills.
- Lack of user adoption and change management
This problem is staff and personal-related. Adopting a new data system can be a culture shock and incorrect usage of the cloud could make the firm more susceptible to data attacks. Migration requires proper planning and training to avoid user confusion which could result in the help desk being flooded with questions as well as set back a company’s view on a successful migration.
The benefits of cloud migration and as a result, modernisation, are clear to see but the hurdles experienced by financial service institutions experienced along the way cannot be ignored. Rather than be overwhelmed or deterred by these challenges, key stakeholders need to collaborate to understand their goals, the journey they need to embark on and the desired outcomes. This will help tackle challenges head on and make the road to the cloud a smoother one. This is more important than ever as financial institutions need to ensure they are modernising their operations with a cloud-native approach to stay relevant and rival their competitors.
