Adoption of Cloud in Financial Services Industry – Interview of Mr. Jayesh Shah, MD & CEO, Prism Cybersoft
There is so much of discussion around Cloud. What is the reality on ground?
The reality is that a lot of businesses have adopted Cloud for various activities. In a survey, 82% of the companies have reported that they saved money by moving to Cloud.
Initially, there was a wave where non critical functions of an organization like attendance monitoring; project planning etc. was moved to Cloud and critical functions were being self managed. But now we see important and critical functions being moved too. We increasingly get queries from financial community if we have applications for trading, risk and settlements on Cloud. I think it’s a fundamental shift in the thought process and adoption.
Several platforms like Salesforce.Com, Netflix have become market leaders being on Cloud. Internally, we also use Cloud based software extensively for managing client interactions, our own engineer’s timesheets etc and experience the benefits of Cloud on a day to day basis.
What are the various categories of services offered on Cloud?
It all started from Software as a Service (SaaS) but now not only software but we see several extensions like Platform as a Service from Google in the form of Google App Engine and Microsoft in the form of Azure, which by the way even we are leveraging for our own application which we are putting on Cloud. Then there is Infrastructure as a Service like the Amazon Web Services and NYSE Euronext Infrastructure Cloud and also a host of services for Individuals. So what started as Software as a Service on Cloud is rapidly extending in other areas. Customer’s acceptability and willingness to subscribe to such services is also increasing dramatically.
How do you see Cloud penetrating Financial Services as a business?
Financial Services as an industry is normally late adopters of any new path breaking technology like Cloud is. Participants here want complete clarity on regulatory aspects, service aspect and continually assess the advantage vs. risk involved. But once they are convinced, the go the full path to embrace such technologies.
My estimate is that Indian Financial Services firms, especially the trading community we operate in is yet to adopt Cloud as a platform because vendors are yet to roll out large, organization impacting platforms on the Cloud. However, we are confident that when such services will be offered, they will be adopted rapidly because these same firms have experienced the benefits of Cloud in other areas.
As a company, do you have offerings on Cloud for Financial Services business?
Yes, we are rolling out a personal portfolio management application on Cloud for individuals because we feel individuals have experienced the benefits of web through success stories like flipkart.com, irctc.co.in and several mailing applications. This solution is not run of the mill PMS offered by several financial services portals. It is very comprehensive and automated application offered as SaaS which will help individuals right up to providing data for filing their tax returns.
There are some other areas which we will offer soon on Cloud which will certainly be an industry first. However at this point of time we can’t disclose it because of confidentiality.
What will be the challenges in hosting applications in Financial Services Industry in India?
Where there are opportunities, there are bound to be challenges. For example, there is not much clarity on whether a bank can sign a water tight agreement and start hosting their data exclusively outside of India. Most bankers won’t do it but can they host such data non-exclusively to avail value added services like analytics? If yes, under what conditions.
Then there is this whole issue of trust. Will a trading house host their proprietary trading strategies and data with the same hosting solution provider who is also hosting for their competitors?
Third, there is the issue of legal enforcement. How fast can a financial institution get remedy in case of a data security breach or loss of data because the service provider decided to close down its service? Agreements could be made tight but capitalization of small service providers itself could be an issue.
What is the future of Cloud?
The future of course looks bright. It is estimated that by 2015, spending on Cloud could be in excess of USD 180 Billion. Innovation will happen on multiple fronts. From Financial Services perspective we will see dramatic changes in Big Data and Analytics. Now each firm need not do big investment in sophisticated analytics tools. There will be smaller, boutique firms specializing in ultra sophisticated analytics tools which will provide services to banks and financial firms over the Cloud. This will be a big leveler especially for small financial services firms. Suddenly a small bank can have the same analytics capabilities as their more sophisticated counterparts like Citibank.
Then, we will see a dramatic change in how content is delivered and accessed. Amazon Web Services Content Delivery Network is again a great leveler for smaller financial services portals and it enables them to distribute content in a low latency environment like larger portals.
Thirdly, it will also change the manner in which applications and data currently in Cloud is accessed. Currently, clients are dependent on their vendors to build in APIs to access these applications.
Once a lot of applications and services migrate to Cloud, which is already happening by the way, we will see a lot of innovation around how these applications and data is accessed from them. For example the Railways could build standard APIs and open access to data from their irctc.co.in platform to private operators to analyze and build in value added services.
The growth of Cloud will also happen because Mobile Apps are growing rapidly. Their growth will feed each other.
I also expect a lot of E-Governance Applications to be put on Cloud by the existing government to bring about service delivery and transparency over the web. In a decade, I expect governments all over the world to be the biggest consumers and also providers of Software as a Service over the Cloud.
Personally do you use Cloud on a day to day basis?
Yes, extensively. I have personally been one of the earliest adopters of Cloud and have experienced its benefits.
I use several apps that are provided over the Cloud. Very recently I signed up with a Cloud storage based company to keep a back up of all my personal documents.