Hybrid Cloud for Open Banking

Need for Open Banking Technology mechanisms:

Now-a-days consumers have multiple accounts with multiple financial institutions. Open banking is a consumer-consented way to provide access to their financial data from their bank to a third-party organization. Banks need to cater to this ask of their consumers and ‘Open Banking’ is a technology enabled solution which can help the bank. With Open Banking technology solutions, a bank can share consumer account information including his/her transactions to a third-party using APIs – of course all of this happens with consent from the consumer only.

The diagram below depicts high level eco-system where consumer data provider bank can share data of the consumer with registered 3rd parties who have consent from the consumer to receive data.

Should banks/ financial institutions build Open banking technology solutions on their on-premises infrastructure? I suggest that the existing investment in on-premise infrastructure should be leveraged to the extent possible but use a public cloud like AWS / Azure /GCP along with on-premise cloud to better infra cost optimization, frequent undertaking of innovative POCs to test innovative business ideas. Other reasons of having a hybrid cloud (consisting of on-premise cloud and one or more public cloud) are:

1.   On-premise cloud infrastructure can be sized only for average traffic load rather than peak load. Public cloud should be used for catering to all traffic bursts that happen usually on very few days in a year. This will keep the overall cost of infra low.

2.   Dev, test environment are not used 24x7. They are usually used 8 hrs and 5 days. So why provision that on on-premise? Keep such environments’ workload on public cloud where you pay only for what you use.

3. Business wants frequent testing of their idea. Upfront investment of infra is needed if on-premises cloud is used. Instead use, public cloud to do to your trials and experimentations. In public cloud you pay only for the duration when you do the trials.

*** End of document ***