TelecityGroup: Take the risk out of cloud connectivity – Adi Ayyagari
Nothing can stop the move of financial services going deeper into digital banking territory, and the resulting need for cloud-based services and the data centres that underpin them. For a heavily regulated industry with rapidly growing data management needs, two key issues stand out - flexibility and security - so we speak to Adi Ayyagari, group head of market development at data centre provider TelecityGroup, about how banks can find the right route into the cloud.
Digital services are reshaping the banking industry and increasingly it is cloud-based capabilities that are changing the face of financial services. Moving IT and data centres off site and connecting to them remotely through the cloud presents many exciting opportunities to reduce costs, improve process efficiency and increase flexibility, but using cloud service providers (CSPs) that make use of the public cloud for access to data centres raises concerns over security.
Some providers of connectivity and data centre services have created solutions that not only give the scalability banks need, but also help to keep all data transfers secure because they are keenly aware of the industry's needs and its history of IT adoption.
"The cloud plays an important role in cutting-edge financial services technology. We have seen the industry adopt advanced technologies like high-frequency trading, epayments and peer-to-peer applications," says Adi Ayyagari, group head of market development at TelecityGroup. "The seismic shift in the industry is away from the prevalence of larger institutions to disaggregation and the delivery of point-to-point services. Complex decision-making is at the heart of financial services and we are seeing the carbon element replaced with silicon as high-performance computing, big data and algorithms become prevalent.
"Financial services institutions are changing the structure of their services to customers - increasing automation and digitising platforms; cloud services are central to that trend. Technology in general is now becoming more commoditised and, hence, is more accessible and cheaper. The cloud has democratised access to sophisticated technologies. With cloud computing, the structural cost-to-serve is drastically changing and native-to-cloud services are plug-and-play, so transaction costs are falling."
At the centre of the matter
TelecityGroup is a provider of co-location data centres. It provides secure, connected environments for the IT and telecoms equipment that powers the digital economy. Its data centres host the kind of bandwidth-intensive applications, content and information on which the banking industry now relies, and its broad experience managing customer data centre requirements enables it to create bespoke solutions for each client.
"Financial services businesses have historically been one of our most important customer segments because we have seen them innovate earlier and often more rapidly than other segments. They are often in the vanguard. As a company, we are at the confluence of two important trends; the first being a demand-led move to hybrid architectures, which drive lower latency, higher speeds and support digital applications, to enable digital transformation, whereby our customers are integrating internal applications and technologies with public cloud resources," explains Ayyagari.
"The second trend is supply led. A few years ago, the cloud was rather nebulous - no one knew where services were located, though it was mainly in the US. Now, the largest CSPs are going local and getting nearer to their customers with new offerings. Highly connected data centres are at the heart of the trend for connection to the public cloud. Interconnectivity is at the core of our offering, which provides an on-ramp for data centres."
Hybrid models: the best of both worlds?
Many large businesses are choosing a hybrid model for cloud access, which sends data traffic through the public internet to access data centres and applications. For banks, this comes with a potentially high level of risk.
"At TelecityGroup, we have a ringside view because we work with many carriers and CSPs, so we see the drivers for public cloud adoption. There is an explosion of digital content. We focus on the digital customer experience, so whether customers use a branch or a mobile device, they are knitted together into a seamless experience - that is digital transformation and the cloud is central to it. We also focus on the post-sale experience, which drives loyalty," says Ayyagari.
"The hybrid architecture is critical to financial services, as banks are not going to throw away their precious investment in systems, the value of which can be extended by plugging them into cloud-based services. Of course, you have to choose the right CSP and there are many factors to consider in that choice, but security is at the top of the list."
Security can be assessed by looking at a CSP's systems architecture, and the processes behind its security audits and protocols. Ayyagari also believes that standards and certification - including SLAs and ISO certification - are important, noting that the per-customer cost of certification is lower for a CSP so it could achieve a broader range of accreditation than a single client.
Furthermore, he believes that culture is a key consideration, prompting banks to choose a CSP for which the main driver is not cost but quality of service through virtual resources that increase flexibility and agility. Similarly, robust governance procedures for hybrid cloud models and a high level of IT maturity are on his list of important criteria. As for TelecityGroup, its Cloud-IX offering helps banks to ensure that - regardless of their choice of CSP - they have a secure connectivity service to bridge in-house IT and public cloud services.
"For a bank hosting IT with us it offers secure and dedicated connectivity without the data traffic ever hitting the public internet. Our customers have one physical connection to Cloud-IX and we can soft provision access circuits to the CSPs of their choice. It connects through a private network, so all of the traffic goes over the Cloud-IX platform. There are four or five layers of security and the traffic is segregated for each customer," Ayyagari explains.
"Any financial services customer will use multiple CSPs because no single one can cater to all of their needs. So, we integrate with many CSPs that our customers can access through virtual circuits. Also, on the public internet, each packet of information hops by different paths, so there is no guarantee of latency. With Cloud-IX, we monitor every hop, so we can maintain and guarantee the level of latency."
Cloud-IX in action
TelecityGroup has a strong track record in financial services, having worked with many facets of the industry and all of its experience has informed the development of the Cloud-IX platform. One of the latest financial organisations to adopt Cloud-IX is social investment network eToro, which enables almost four million users in over 170 countries to invest in currencies, commodities, indices and stocks.
The decision in early 2015 to implement Cloud-IX was taken with the goal of achieving a flexible, secure and resilient hybrid cloud deployment for its core IT infrastructure. eToro migrated select mission-critical components to the public cloud via Microsoft Azure ExpressRoute, while still operating private infrastructure located in TelecityGroup's data centre facilities. This allows the company to provide support for its legacy developments and architecture, while using the public cloud to drive innovative service developments that it can test, develop and roll out more quickly.
The programme involves eToro moving mission-critical applications, including the IT supporting its social trading service, to the Microsoft Azure public cloud computing platform. Its private infrastructure, however, has been relocated into TelecityGroup's London data centre, where its core trading functions will reside. This allows it to meet the strict data requirements laid down by industry regulators. A direct connection to Microsoft Azure ExpressRoute via Cloud-IX seamlessly links eToro's private and public infrastructure so that it can not only bypass the public internet, but also benefit from reduced network costs, increased bandwidth throughput and a more consistent network experience.
While eToro is not a bank, the benefits it sees in using Cloud-IX are clearly relevant to any organisation in the financial services space, where the need to keep sensitive data from the public internet must be balanced against the growing pressure to more quickly develop innovative services in a cost-efficient manner.
"Cloud-IX opens up the world of cloud services easily to financial services companies, so they can get on with their business without worrying about integration and configuration. It is flexible and agile, so our customer experience is one of simplicity. It reduces the cost and the friction of doing business," says Ayyagari.