Cloud megatrends among the region’s financial institutions are transforming the way data centers operate.
Disruptive shifts in business demands, advances in cloud technology and changes accelerated by the pandemic have meant a growing focus on public multi-cloud environments, away from the on-prem and single cloud approach.
In fact, some experts would argue that the cloud is now becoming the de facto data center.
Meanwhile, the COVID-19 pandemic has accelerated global financial institutions’ adoption of cloud solutions in the past year.
With better time-to-market, application uptime, infrastructure security, compliance and operational visibility, multi-cloud environments can help organizations drive better operational efficiencies and sustain competitive advantage.
DigiconAsia talked to Warren Aw, Managing Director, APAC, Epsilon, about cloud megatrends in Asia Pacific, particularly in the financial services industry.
In what ways has hybrid cloud and multi-cloud adoption made data centers more complex?
Aw: Data centers have now become important physical hubs for businesses to connect to the cloud. The data centre itself isn’t more complex, but rather, it has been virtualized to support workloads across multi-cloud environments. They have evolved from being traditional computing and storage facilities to more cloud oriented.
This also means there is a greater focus on the networking component since apps and data are traversing between the public clouds and the enterprise data centres or private clouds. Dedicated interconnection enables businesses to optimize the transfer of data between this infrastructure with better reliability and security.
What are some megatrends you’re seeing in the cloud and data center space in Asia Pacific? How has the COVID-19 pandemic impacted the landscape?
Aw: Multi-cloud is definitely a megatrend as enterprises across Asia Pacific have reached a new stage of cloud maturity. They are starting to see the benefits from using a mix of cloud for different uses, e.g., Amazon Web Services as the primary for compute while using Google Cloud Platform for workload deployment.
The focus on multi-cloud has also driven the need for cloud networking solutions that supports secure cloud-to-cloud connectivity with better control and visibility.
This is especially interesting as we see more businesses turning their focus towards cloud-first strategy – prioritizing cloud computing over physical resources.
COVID-19 has certainly accelerated these priorities for many businesses as end users are now consuming more digital services in everyday life. According to Gartner, cloud spending will accelerate post-COVID-19, making up 14.2% of the total global enterprise IT spending market in 2024, up from 9.1% in 2020.
With the growing adoption of cloud technologies, how are financial institutions in the region managing digital transformation, especially being in a highly regulated industry sector?
Aw: The financial services industry has been one of earliest sector exploring the benefits of the cloud. Financial institutions (FIs) are becoming more reliant on cloud service providers to support their daily operations. Increased reliance also brings greater risk of being exposed to cyberattacks or even unplanned downtime.
FIs will have to ensure risk management is in place covering several aspects such as application security, data and privacy protection and business continuity. At the same time, there is a need to have visibility over the real-time network utilization and statistics.
They also have to carefully review, monitor and test the third-party vendors they are working with to connect to the public cloud services – e.g. using dedicated connection instead of using public internet to access the cloud.
What are the challenges the financial services industry faces – with regards to security, agility, scalability, compliance and data sovereignty – and how should it address these challenges?
Aw: I think there are two ways to look at the challenges that FIs are facing – one being regulatory and the other being operational.
Regulatory challenges refer to compliance, security, and risk management. Many regulators consider the use of cloud services as a form of outsourcing. This usually involves multiple parties including the network provider and the cloud service provider. FIs need to assess the risk profile of these vendors and determine the controls required for protecting their data and where it should be located. FIs must ensure their connectivity to the cloud and between the clouds are deployed over a private network instead of the public internet. Having strong network security such as firewalls to secure the network between the FI and the internet as well as connections with third parties is a must.
As for operational challenges, they need to be able to scale their clouds to grow their digital services and meet the usage requirements. Other aspects include having visibility to continuously monitor utilization of its system resources such as the network throughput, latency, and packet loss. It is critical to have a network that can pivot to these changes such as increasing bandwidth or short-term cloud deployment for backing up non-mission critical data.
However, not all network providers can cater to such demands. At Epsilon, we have a network-as-a-service (NaaS) platform called Infiny that allows businesses to deliver on-demand connectivity to the cloud service provider of their choice.