Cloud fit for finance

IntroAs a business model, the cloud’s massive resources and ubiquity offers unbeatable value – but it has evolved as a general-purpose solution, and not one geared to the very special demands of financial services.

As business moves to the cloud, however, developments are accelerating and industry forums are emerging with the power to control and shape tomorrow's cloud structure and experience. This presents a real opportunity for the finance industry to become involved and make sure that it will be served by a cloud that is fit for finance.

In this article we look at just three areas where the cloud could have so much to offer financial services and yet, in its current form, falls short of what could be achieved. These are simply pointers to encourage further discussion and, above all, participation by major players in the finance industry.


Controlling the cloud for compliance

The whole evolution of the cloud as a universal system of storage, compute and communication has been geared by the need to deliver on demand: "ask and ye shall receive".

If the shortest or most obvious routes for transmitting data are in any way compromised, the network will divert its messages any way it can, rather than fail to deliver. The e-mail from next door will reach you, even if it is forced to travel via New York, London and Tokyo to do so.

This is one fabulous achievement, but it presents real and growing problems as governments wake up to the strategic value and implications of all this data on the move. New regulations are beginning to focus on this area and tighten restrictions on the free flow of information. Banks in Canada, for example, can no longer rely on standard MPLS services for shifting data between branches, because MPLS guarantees delivery but does not specify what route is taken. Any slowdown in local routes, and data is likely to be diverted south of the border via US nodes to ensure timely delivery - but the Canadian Government no longer allows its citizens' personal data to be sent to or via the USA.

In the United States, recent extreme weather means that the East Coast regions are considered to be meteorological danger zones. So banks are required to have backup and emergency facilities that avoid the Eastern seaboard. Ironically, in view of the last example, it can mean that a typical London, New York, Phoenix Arizona financial transaction may have to be diverted via Canada to comply with such regulations.

Ah... the problems of the rich! International players can travel to Zurich to discuss financial arrangements with their personal bank, but they may not be able to do the same when visiting their Swiss bank's Manhattan office just round the corner - because the Swiss government does not allow certain personal data to flow out of Switzerland.

These examples are just a glimpse into the growing responsibilities for anyone holding large amounts of data: whether personal data, public data or financial data. To add to this complexity: who does have liability when something does go wrong? You give private data to your bank and then you discover it has got into the wrong hands: is it ultimately the bank's responsibility? Or does the bank then sue the service provider for letting secure data escape?

What is needed for the financial industry - as well as many other large organisations impacted by these issues - is a fundamental rethink of the cloud's priorities? How the data is delivered could be as vital as the delivery itself. In fact it would be better to destroy and lose some data than have it delivered via a route that breaks the law.