Top Challenges in Cloud Migration for Banks and How Consulting Services Can Help

Banking industry, like healthcare, deals with user data and has the mandate to ensure integrity as per the industry standards. Information in context to the digital transactions, personal details, if leaked, can cause identity thefts, money scams, and more. In order to avoid such situations while augmenting user experience, decision-makers are bringing in the consideration to shift to cloud computing and present a safe and efficient environment.

However, to shift the entire system to cloud requires migration planning, data classifications, further storage, and, most priority, the safeguarding of data during transformation. To summarize the preface, there are certain concerns and challenges that make it difficult to migrate to the cloud. In this case, banking decision makers are choosing cloud consulting services prior to migration services to plan out the entire process while navigating the challenges with viable solutions.

That being said, we bring forth the banking-industry-focused challenges and how cloud-focused services solve them with the assistance of a cloud migration services provider.

Cloud Migration Challenges and Their Solutions With Cloud Transformation Services

As we mentioned above, if poorly planned, cloud migration can open up windows for data breaches. The objective of the blog is to eliminate such possibilities, bring business agility into systems, and keep banks, digital information, and user data safe. Keeping that as the core discussion, it is high time to discuss the challenges while simultaneously bringing their solutions.

1. Complex Regulations and Data Sovereignty

With legacy systems, the concerns of abiding by regulatory laws rise. Keeping in mind that they have long been replaced with upgraded laws, they often found not to be adhering to the region-specific compliance that is necessary for data residency, end-to-end encryption, and customer privacy. Such situations bring the banks into penalty regions and have the possibility of tarnishing the brand’s reputation among users, leaving a decline in revenue generation.

Solution:

When such businesses opt for cloud transformation services, they get access to consultants who have extensive insights into the BFSI industry. During the consulting phase, they conduct a regulatory gap analysis, design cloud architectures for data localization policies, and implement automated compliance monitoring and encryption models. This way, the compliance challenges are resolved and data integrity is welcomed into cloud migration planning.

2. Legacy Core Banking Systems

As we mentioned above, banks and fintech businesses rely heavily on their legacy frameworks and monolithic architectures that are interdependent and intertwined with daily operations. Migrating without business planning and understanding the legacy system can cause risks of data corruption and department-based downtime. Such a scenario often leads to lag in workflow and results in issues pertaining the efficiency.

Solution:

When the cloud consulting services are powered and expert consultants begin planning the migration process, they perform a detailed system assessment. That being said, they recommend businesses with a suitable migration path for rehost, refactor, or rebuild to instill the hybrid environment that eliminates system downtime.

3. Data Security and Customer Privacy

As we mentioned above, the data security is essential when working for the banking industry. That being said, it is seen that throughout the migration process, if the data is not stored and accesses keeping the safety in mind, the cyberattackers might find even a minute vulnerability and access the entire data to exploit. Such data breaches and customer privacy are always to be contained and maintained, respectively, to stay safe from reputation damage and legal issues.

Solution:

When banking businesses opt for cloud transformation services, the cloud consultants prioritize building a framework that keeps the data safeguarded. With end-to-end encryption, multi-factor authentication (MFA), and role-based access control, they focus on introducing a zero-trust architecture that defends the data storage and accessibility against external and internal threats.

4. Vendor Lock-In Risks

Oftentimes, banking and finance companies commit to a single vendor for their business solution and lock in future scalability and innovation options. This occurs because the vendors may have limited features and expertise accessibility to offer the businesses with the functionalities they need. It also depends on the decision makers of thief-party vendors to upscale or not. In such situations, banking businesses become restrictive to other innovative options and might lose the users interest as per the modernizing technologies.

Solution:

In these situations, the cloud consulting services providers assists banks in updating the existing vendor roadmap and transitioning to multi/hybrid cloud environments after the migration. This way, banks can get assistance from consultants to include open-source tools and API integrations that do not limit them to a single vendor and limit their innovation potential.

5. Interoperability with FinTech and Legacy Systems

Sometimes banking businesses and fintech firms prefer not to have complete transformation but a mix of both modern technologies and legacy systems. The concept is not outdated but an innovation initiative towards slow transition with result assessment. In this case, they often find themselves doubtful towards the changes and modification that are required based on priority.

Solution:

In this case, the cloud consultants focus on bridging the gap between the modern and legacy solutions with integration middleware like ESBs and iPaaS. They also bring in the concept of DevOps and CI/CD pipelines to ensure secure deployments with cloud transformation services that build a balance between both solutions. Considering that banks prefer order and clarity, similar to every decision maker, their consultants tackle the entire cloud computing and transformation lifecycle management.

6. Downtime and Business Disruption

Online transactions and digital payments have become the norm of the world where going cashless in common. In this sense, users depends on all time connectivity and hassle-free services. However, if the migration is not planned well and causes downtime and business disruption, the banks and fintech businesses might face hefty losses within minutes. This implies that if the system is down, all the services and network might go off and cause users issues with payments and translation, and ultimately frustration.

Solution:

To avoid such massive losses and user frustrations, banking businesses opt for cloud consulting services where the consultants build the roadmap for an efficient and downtime-proof migration plan. In this, they focus on creating phased migration strategies with rollback plans, setting up blue-green deployments, and enabling disaster recovery and failover mechanisms across regions. This way, they eliminate the massive disruption and ensure business agility with ongoing migration.

7. Cloud Skills Gap

Using legacy systems for the longest train workforce and internal IT teams in context. However, when banks decide to go modernized and switch to cloud model, the workforce takes to grasp onto it. This does cause confusion and delay in tasks for a while.

Solution:

Rather than letting the teams figure out the transformation and technology on their own, cloud consultants train them for efficient functioning with certified cloud engineers and architects. This way, the businesses efficiently modernize and work on skills gaps with consultants.

Conclusion

As we wind up the cloud migration and consulting bifurcation in context to challenges, we apprehend the imperativeness of a cloud consulting services provider.  With their migration-focused valuable insights, they ensure that the banking businesses maintain data integrity, secure transaction details, and ensure modernization focusing on business agility. That being said, we hope that you make decisions for consulting that are not only beneficial to you but also overcome the challenges your bank or fintech business might face.