Releasing The Benefits of the Cloud
I’ve had the responsibility of designing and delivering technology solutions in some of the world’s largest financial institutions and payment companies. In the 30 years I’ve been in the industry, working with organisations like HSBC, Barclays and ACI, I’ve seen many changes, but few compare to the decisions organisations are facing right now.
There is now a real commitment to designing payments systems for deployment in the cloud and moving away from cumbersome legacy software running on proprietary servers and mainframes. In the past, I used to have to start my conversations with customers by explaining why we should use the cloud. That’s changed, and now the conversations begin with analysis of the return on investment from the cloud as organisations have accepted that maintaining their operation on proprietary hardware is putting them at a competitive disadvantage.
Benefits of the cloud
There are significant benefits that those responsible for technology need to be aware of. I often highlight these as the main elements for creating a business case to move to the cloud. The principal benefits are:
§ Hardware costs – quite simply, cloud containers are cheaper than mainframes and HP NonStop (Tandems), but can deliver the same levels of reliability and scalability.
§ Flexibility – you can now access off-the-shelf infrastructure components that can be utilised in a payments system. This avoids the need to build hand-crafted components associated with the legacy world.
§ Skills and experience – the use of standard solutions and components means that there are more people available with the skills to develop in the cloud than there are developers for legacy systems.
§ Avoiding the need for redundant DR – half of the cost of an existing system is redundant DR, but distributing a cloud solution across multiple cloud availability zones and regions eliminates this requirement.
§ Capacity issues – utilising elastic scalability in the cloud avoids the need for spare hardware capacity which is purchased years in advance.
Transitioning to cloud technology
The popular misconception is that moving to the cloud is difficult and complicated. The challenges of moving are people and process - not technology. The lack of awareness about how you work differently in the cloud is what slows projects down but when you’ve spent years doing this, as we have at Renovite, then the process is well drilled and efficient.
As an example, we work with a transaction processor in the US that now uses the Reno-Switch and Reno-Recon products. They went from contract to live in just over six months and now use Renovite to process Mastercard and Visa transactions. They did not have to buy and install hardware, as it was all deployed in AWS. The published APIs for our products meant that integrating with their existing cloud-based solutions was all very straightforward.
What we realised during the successful tender is that no other supplier could provide a complete suite of cloud-native payments processing products to integrate into their own cloud-native merchant management solutions. Any other solution would not have been a legacy application architecture deployed in a virtual machine, which brings many of the management and integration problems of traditional server-based deployment.
Ultimately, this defeats the purpose of attempting the job in the first place and is where many projects hit problems.
Adaptable now and in the future
Managing the pace of change is one of the biggest headaches for Directors in financial services. Those responsible for technology are managing the pace of change on mission-critical applications that were built using architectures originating in the 1980s that are now quite brittle as a result of continuous modification and extension.
This will not end well if people don’t adapt as it can jeopardise systems and even careers. As complex new transaction types arise, the ability to be adaptable in the future is just as important as the ability to cope now. At present, every change in the system puts at risk all existing transactions currently being processed. The dated systems are easy to break, as we have seen with recent high-profile failures in retail banks.
The future lies in systems which can orchestrate multiple changes through ‘rules’ rather than code changes. This will involve configuration and not engineering. Rapid innovation and delivery can now be achieved with even greater resilience in a cloud-native environment.