What it really takes to move existing applications to cloud-enabled aaS

Previous blogs in this series explored the advantages and future potential of the as-a-service model. In this final post, we look at what moving existing applications to aaS entails.

Let’s start by considering some of the pressures, preferences and market developments behind the need to migrate:

• Many technology owners may see moving to an as-a-service model with either an MSP or ISV as losing control of their destiny, something many are reluctant to do.
• Financial institutions traditionally focus on safety, security, resiliency, scalability and the continued health of their operations. Trusting that another organization will meet these high standards is an obstacle to adoption and requires the right levels of external audit and certification.
• Regulations on outsourcing have evolved considerably in recent years, with things such as DORA setting out the standards and governance required by financial institutions when utilizing as-a-service solutions.

These heightened concerns and requirements have intensified pressure on the financial system and its affiliates, particularly with regard to technology.

Cloudy conditions

Increasingly, financial institutions are adopting public and private clouds to drive innovation, tighten security, enrich customer services and guarantee near-limitless scalability. However, doing it fast enough to keep up with competitors and generate a meaningful ROI from their modernization programs is a significant challenge.

This enthusiasm for all things cloud is a direct result of nimble digital players upstaging slower, larger, enterprise monoliths.

For financial institutions, cloud adoption and acceleration are no longer solely about efficiency and revenue enhancement. Now, top of mind is surviving in a world where speed, scale and innovation are the sole reward generators. Fortunately, as-a-service models help companies turn obstacles into opportunities.

For instance, adopting as-a-service models releases local IT staff from the need to install, patch, customize and integrate ISV applications, allowing efforts to be redirected toward developing differentiated offerings.

Some ISVs offer a dedicated SaaS version of their offerings. And, while this may be a quick way to migrate an on-prem application to a service offering, there are limitations. Moving an entire business function to aaS is not easy.

To lighten the load, many institutions partner with a managed service provider (MSP) that offers multiple integrated applications and services in a consistent, as-a-service solution. Thanks to public cloud integration resources (e.g., Amazon AppFlow), MSPs can provide infrastructure and application support for the entire offering.

For example, hosting a trading system and middle- or back-office system with the same service provider green-lights a seamless flow of trade data from one system to the next. This option really highlights the added value of as-a-service models.

Flexible support

That said, the MSP might not be offering the application in question. Not a problem. MSPs are more than happy to add a preferred ISV application to their roster if they spot a larger market opportunity.

Also, some applications must remain on-premises or be hosted beyond the cloud. A partner experienced in managing hybrid architectures (including data flows and integrations across data centers) will have the necessary expertise to come up with a credible solution for streamlining operations.

Breaking down barriers

Data, siloed within an application database, has limited reporting and analytics capacity. Public clouds offer as-a-service data analytics that can be easily integrated with most ISV system data sources, providing additional analytics capabilities (e.g., AWS Redshift and QuickSight). This becomes especially powerful when combining data from multiple siloed applications.

Likewise, public clouds provide easy-to-consume ML and GenAI capabilities for extending vendor applications (e.g., Amazon SageMaker). These tools enable firms that lack the required specialists or data scientists to add ML capabilities.

First: For the many financial firms that have made cloud adoption a priority but still don’t know exactly how to derive the numerous benefits, the first step is very simple. Take stock of what your firm has already adopted. Many firms cite broad cloud adoption, but inconsistent utilization and recognition across the enterprise.

Second: Banks and capital markets firms face several adoption challenges, including regulatory changes, internal governance and compliance and limited skills within the organization. Each challenge has its own impact on how a firm charts its acceleration journey, and acknowledgement and resolution are central to ensuring that cloud acceleration goes off without a hitch.

As-a-service offerings, where the hosting, run and change are provided by an MSP experienced in managing these applications in the cloud, can remove internal adoption hurdles and accelerate cloud lift-off.

Third: Financial firms need to review incumbent solution providers to learn how direct competitors are redefining the way business is conducted. Entering a level playing field with new solutions and integrated ecosystem providers is important. The longer competitors have to accelerate, the more difficult it becomes for incumbent firms to catch up, leaving users at a disadvantage.

Systems integrators, such as DXC, are building a fully open ecosystem that’s better suited to providing advanced capabilities for existing applications. That being so, there’s significant scope to gain ground on the fintechs and close the agility gap.

In my opinion

There’s no universal solution for accelerating cloud adoption. However, there are frameworks that align with existing cloud strategies and frameworks, like as-a-service solutions (for improving agility, removing constraints and closing skill gaps). This is especially true when considering what the cloud is, what it can do for your firm and how it relates to unique business objectives.

The point is, it’s time to stop thinking about business systems in isolation and examine how as-a-service solutions deliver strategically on cloud-enabled services, even supporting entire business unit processes.