Veejay Jadhaw, Digital and Cloud Computing in Financial Services
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The document discusses the importance of cloud computing in the financial services sector, particularly for community banks, emphasizing its potential to reduce operational costs and enhance innovation. It outlines various cloud deployment models (public, private, hybrid, community) and addresses concerns related to data privacy, security, and compliance that institutions face when adopting cloud technology. The document also highlights a TCO simulation to demonstrate the cost benefits of a private or hybrid community cloud approach for financial organizations.
Veejay Jadhaw, Digital and Cloud Computing in Financial Services
- 1. Digital & Cloud Computing in Financial Services Community Banks Veejay Jadhaw Global Head, Core Solutions & Platforms in Cloud Global Financial Services, SAP
- 2. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 2 Agenda Why Cloud Matters Cloud Computing Deployment Models (Setting Context) Community Use Case Examples, Design Patterns, & Cost Impact Analysis (illustrative) Cloud Adoption Concerns and Mitigation Approaches Cloud Adoption in Financial Services Summary and TCO reduction simulation
- 3. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 3 Why Cloud Matters Innovation versus IT Run Cost - Paradox Typically approx. 70% - 90% of IT cost is allocated to running the banks current technology landscape, impacting banks ability to invest in innovation. Cloud Computing will be Omni-Present Cloud computing’s most disruptive impact will be changing they way consumers research and buy financial services by offering banks the capabilities to easily leverage social and mobile media to improve banking experience, particularity for the millennials, e.g. mint.com. Standardization and Simplification: Banks need to focus on industrializing their IT & business processes to reduce Cost-To-Income Ratio and Improve Agile and Speed to Market to compete effectively. By 2016, poor return on equity will drive more than 60% of financial services worldwide to process a majority of their transactions in the cloud - Gartner
- 4. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 4 Cloud Deployment Models Resources are shared between organizations. The cloud service provider owns and operates the infrastructure and offers access via the Internet. Public Cloud A cloud infrastructure operated solely for a single organization, whether virtually managed internally or by a third-party. Private Cloud A composition of more than one entity (private, public or on premise) that remain unique entities but are bound together. Hybrid Cloud Provisioned for exclusive use by a specific community of consumers from organizations that have similar, mission, security requirements, policy, and compliance considerations. Community Cloud
- 5. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 5 Community Cloud Use Case Suitable for co-operative banks, community banks and credit unions with similar mission, products, processes, currencies, and security policy & regulatory requirements. Preserve a high security level by means of Private or Hybrid cloud deployment models
- 6. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 6 Community Cloud Design Pattern & Cost Impact Analysis
- 7. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 7 Cloud Adoption Concerns & Mitigation in Financial Services Data Privacy Loss of Control of Data Data Breach Security Compliance Data Privacy Data Retention Data residency Top 3 Cloud Adoption Concerns Private / Hybrid Cloud with Encryption or Tokenization strategy primary reasons to manage the concerns listed below By comparison Banking and Finance industry has mature with stringent data protection requirements due to PCI, GLBA, FFIEC, OSFI and other related regulations or standards.
- 8. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 8 Cloud Adoption Based on survey conduced by Cloud Security Alliance (CSA) Approx. 61% of Financial Services Institutions are developing cloud strategy within their Organizations. The most common Strategies use a mix of Private, Public or hybrid cloud deployment models By 2016, poor return on equity will drive more than 60% of financial services worldwide to process a majority of their transactions in the cloud - Gartner
- 9. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 9 Private Community Cloud Summary & TCO Simulation Suitable for co-operative banks, community banks and credit unions with similar mission, products, processes, and security & regulatory requirements. Evaluate all design patterns of Community Cloud, keeping a balance between TCO and Security. Private / Hybrid cloud with data encryption and tokenization strategy should be considered to manage security risks and regulatory compliance. TCO simulation Example: Core Banking implementation would cost, e.g. approx. $xxM per bank and additional $xxM per year per bank for on-going support and regulatory compliance. Leveraging “Private / Hybrid Community Cloud” would split the implementation, ongoing support cost and regulatory compliance costs among all participating member banks, while each realizing full benefits. Economies of Scale Simplify and standardize the operating model across all participating members of the co-operative, thereby improving speed to market, agility, collaboration and data consistency TCO Summary Illustrative
- 10. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 10 Disclaimer This presentation outlines our general product direction and should not be relied on in making a purchase decision. This presentation is not subject to your license agreement or any other agreement with SAP. SAP has no obligation to pursue any course of business outlined in this presentation or to develop or release any functionality mentioned in this presentation. This presentation and SAP's strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement. SAP assumes no responsibility for errors or omissions in this document, except if such damages were caused by SAP intentionally or grossly negligent.