Cloud Tech Blueprint Bulletin #1

Welcome to the Cloud Tech Blueprint Bulletin #1!

I am excited to bring you the first edition of the Cloud Blueprint Bulletin, my monthly newsletter dedicated to the latest developments, trends, and insights in cloud adoption and technology across various industries.?

In this inaugural issue, we turn to the banking sector. As the rapid pace of digital transformation and evolving customer expectations have challenged traditional banking models, forward-thinking financial institutions are embracing cloud technology to drive innovation, enhance agility, and optimize costs.

This edition of the Cloud Blueprint Bulletin explores how leading banks leverage the power of the cloud to redefine their operations, deliver superior customer experiences, and stay ahead of the competition. From migrating legacy systems to cloud-native architectures to harnessing the potential of data analytics and artificial intelligence, the banking sector is at the forefront of cloud adoption.

JCB's Cloud Migration to AWS

JCB International Credit Card Co., Ltd. (USA) recognised the potential of cloud technology and embarked on a strategic migration of its business systems to Amazon Web Services (AWS) .?

Background and Challenges

JCB, the only international payment brand based in Japan, faced several challenges in adapting, from the rise of modern payment methods, such as electronic money and QR code payments, intensified competition and the need for improved business agility, continuity, and cost optimisation. Additionally, the company's on-premises infrastructure presented limitations on scalability, resource allocation, and long-term data storage and analysis capabilities.

Cloud Migration Strategy

To address these challenges, JCB initiated a system infrastructure optimisation project in 2017, ultimately deciding to migrate its business systems to AWS in 2018. The company adopted a "shift" approach, maximising the benefits of cloud computing rather than simply replicating its existing on-premises configuration. JCB formed a virtual organisation across its system headquarters and followed the AWS Cloud Adoption Framework (AWS CAF) to guide the migration process.

Technical Implementation

API Infrastructure

JCB recognised the need for an efficient data exchange mechanism between external financial institutions, settlement companies, and internal business systems. To address this, the company built an API infrastructure on AWS, leveraging managed services such as Amazon Aurora, Amazon DynamoDB, and AWS WAF for scalability, security, and protection.

The API infrastructure enabled JCB to streamline data integration processes, reducing the time required for infrastructure procurement and deployment from six months to three months. As of the end of 2022, the number of linked systems using APIs has grown to over 100, facilitating seamless communication and data exchange.

Data Infrastructure

JCB's on-premises data warehouses faced limitations in storage expansion and data retention periods. To overcome these challenges, the company constructed a data infrastructure on Amazon Simple Storage Service (Amazon S3), enabling cost-effective and scalable long-term data storage and analysis over 5-10 years.

The data infrastructure leveraged Amazon Athena for data processing and AWS Glue for cataloguing and managing accumulated data. As of October 2022, approximately 32 TB of data had been stored, with plans to expand to around 120 TB by 2027. JCB also implemented data anonymisation processes using tools on the data infrastructure, enabling secure and compliant data analysis for services like JCB Consumption NOW.

Future Developments

JCB plans to expand its cloud adoption by considering the migration of core systems requiring high availability to AWS. Additionally, the company aims to leverage AWS to deliver embedded finance solutions, enabling non-financial businesses to incorporate payment functions into their services. JCB will continue to develop and provide innovative applications and services on AWS to a wide range of businesses.

Benefits and Outcomes

JCB's migration to AWS has yielded significant benefits in terms of business agility, continuity, and cost optimisation:

1. Improved Business Agility: The cloud migration contributed to shorter development cycles for new services and faster server procurement processes, enabling JCB to respond more promptly to market demands.
2. Facilitated Business Continuity: By leveraging AWS's robust infrastructure and services, JCB has enhanced its ability to maintain business continuity and ensure high availability for critical systems.
3. Optimised IT Costs: JCB anticipates a reduction in infrastructure costs of approximately 30 per cent, along with a decrease in operational overhead, through standardisation and efficient resource allocation on AWS.

Learnings

JCB's cloud migration journey to AWS exemplifies the transformative power of cloud computing in the financial sector. By adopting a strategic "shift" approach and leveraging AWS services such as API infrastructure, data infrastructure, and managed services, JCB achieved improved business agility, continuity, and cost optimisation. The company's commitment to leveraging AWS for future initiatives, including embedded finance solutions and innovative applications, further solidifies its position as a leader in the digital transformation of the financial industry.

Starling Bank's Data-Driven Approach with Google Cloud

Starling Bank recognised the importance of leveraging its growing wealth of customer data to deliver superior services and enhance customer experiences. To achieve this goal, Starling Bank turned to Google Cloud 's BigQuery as an analytics solution, enabling the bank to unlock valuable insights from vast amounts of data.

Background and Challenges

As a customer-centric organisation, Starling Bank wanted to provide personalised and convenient services to its users, needing the ability to efficiently analyse and interpret the bank's ever-increasing data on customer interactions, transactions, and usage patterns. Starling Bank needed a solution that could handle massive amounts of data in real time while providing employees across the organisation with actionable insights.

Cloud Strategy

BigQuery: Scalable and Accessible Analytics

Starling Bank evaluated various analytics solutions and ultimately chose BigQuery for its simplicity, speed, scalability, and reliability. With BigQuery's serverless architecture, Starling Bank could analyse terabytes of data seamlessly, without the overhead of managing infrastructure. The straightforward web interface enabled technical and non-technical staff to query and explore data efficiently, fostering a data-driven culture across the organisation.

Integration with Google Maps Platform

To enhance the customer experience further, Starling Bank integrated the Google Maps Platform with its services, providing customers with geographical locations for their transactions, allowing them to track spending and identify potential fraudulent activities.

Exploring Cloud AI and Machine Learning

As a participant in Google's applied machine learning Launchpad Studio, Starling Bank is exploring the potential of Google Cloud AI and Machine Learning products. The bank aims to analyse transaction behaviour using these advanced technologies, further improving operational efficiency and customer satisfaction.

Benefits and Outcomes

Starling Bank's adoption of Google Cloud's data analytics solutions has yielded significant benefits:

1. Real-time Insights: BigQuery's analytics capabilities enable Starling Bank to respond rapidly to customer needs by deriving insights from real-time transactional data.
2. Improved Customer Experience: Google Maps APIs and real-time transaction notifications enhance transparency and convenience for customers, helping them better manage their finances.
3. Data-Driven Product Development: By analysing customer behaviour and usage patterns, Starling Bank can prioritise and develop new features and products that align with emerging customer needs.
4. Scalability and Efficiency: The serverless architecture of BigQuery and the broader Google Cloud infrastructure ensure seamless scalability as Starling Bank continues to grow while optimising resource utilisation and reducing management overhead.

Learnings

Starling Bank's partnership with Google Cloud exemplifies the importance of data-driven decision-making in the financial sector. By leveraging BigQuery's analytics capabilities, integrating with Google Maps Platform, and exploring the potential of Cloud AI and Machine Learning, Starling Bank has transformed its data into a valuable asset for enhancing customer experiences, driving product innovation, and optimising operational efficiency.

Research Review: The Impact of Cloud Computing on Financial Banking Programmes in Jordanian Commercial Banks

The research (see DOI link:10.6007/IJARAFMS/v13-i4/20036) by Amjad Ghazi AL Habashneh, Prof. Hussein Al-zeaud, Dr. Mansour Alkhazaleh, and Omar Amjad Al-Habashneh examines the impact of cloud computing on the performance of financial banking Programmes in Jordanian commercial banks, specifically through the utilisation of Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS) models.?

Background on Cloud Computing in Banking

The adoption of cloud computing in the banking sector has been driven by several factors, including the need for scalability, cost optimisation, and agility in responding to rapidly changing market demands. Jordanian commercial banks have recognised the potential of cloud computing and have been exploring various service models to support their financial technology initiatives.

Cloud Service Models in Banking

1. Infrastructure as a Service (IaaS): This model provides banks with virtualised computing resources, such as servers, storage, and networking components, enabling them to deploy and manage operating systems and applications within a cloud environment.
2. Platform as a Service (PaaS): PaaS offers a complete development and deployment environment, including operating systems, databases, and middleware, allowing banks to build and run custom applications without the need for extensive infrastructure management.
3. Software as a Service (SaaS): SaaS delivers software applications over the internet, accessible through web browsers or APIs, eliminating the need for banks to install and maintain complex software on their premises.

The adoption of these cloud service models has brought numerous benefits to the banking sector, including increased agility, scalability, and cost-effectiveness. However, challenges such as data security, regulatory compliance, and organisational resistance to change must be addressed for successful cloud implementation.

Key Findings on Cloud Computing Usage

One of the notable findings was the high level of cloud computing utilisation in Jordanian commercial banks, indicating a significant adoption of this technology in the banking sector.

Impact of Cloud Computing on Financial Banking Programmes

The study's results demonstrated a statistically significant impact of cloud computing utilisation, represented by the dimensions of IaaS, PaaS, and SaaS, on enhancing the performance of financial banking Programmes in Jordanian commercial banks.

Analysis of IaaS Impact on Programme Performance

The researchers found that the use of IaaS had a positive and significant effect on improving the performance of financial banking Programmes. IaaS enabled banks to deploy and manage their applications and operating systems within a virtualised infrastructure, providing scalability and flexibility to meet changing demands.

Analysis of PaaS Impact on Programme Performance

The study revealed that the adoption of PaaS positively influenced the performance of financial banking Programmes. PaaS provided banks with a comprehensive development and deployment environment, allowing for faster application development and integration with existing systems.

Analysis of SaaS Impact on Programme Performance

The researchers observed a significant impact of SaaS on enhancing the performance of financial banking Programmes. SaaS applications, accessible over the internet, facilitated the delivery of various financial services to customers, improving efficiency and user experience.

Discussion of Statistical Significance

The study's findings demonstrated a statistically significant impact of cloud computing utilisation on the performance of financial banking Programmes, with a significance level of (α ≤ 0.05) across all three service models (IaaS, PaaS, and SaaS).

Recommendations and Future Directions

Based on the study's findings, the researchers provided several recommendations for Jordanian commercial banks:

1. Expand support and development of cloud computing infrastructure to facilitate the effective use of this technology in enhancing the performance of banking Programmes.
2. Continuously assess and adopt appropriate cloud service models (IaaS, PaaS, SaaS) based on specific business requirements and workload characteristics.
3. Address data security and regulatory compliance concerns through robust governance frameworks and security measures.
4. Invest in employee training and skill development to foster a cloud-ready workforce and facilitate the cultural shift toward cloud adoption.
5. Collaborate with cloud service providers and industry partners to leverage best practices and stay ahead of emerging trends in financial technology.

The research has highlighted that the adoption of IaaS, PaaS, and SaaS models has enabled banks to leverage scalable and flexible computing resources, streamline application development and deployment, and deliver innovative financial services to customers.

As the banking sector continues to evolve and embrace digital transformation, cloud computing will play a pivotal role in driving operational efficiency, cost optimisation, and customer satisfaction. By addressing the challenges associated with cloud adoption and implementing effective strategies, Jordanian commercial banks can position themselves at the forefront of financial technology innovation.

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