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Cloud Computing for Financial Institutions

Vivek Kejriwal

Business Solutions Group Retail and Corporate Banking HCL Financial Services

often. platforms. Build. It is a complete paradigm shift from the way IT is perceived by enterprises as well as service providers. SaaS. Touted as one of the most important technology shifts in recent times. Usage based granular payment services and massive scalability. Internet which forms the basis of cloud computing has traditionally always been depicted as a cloud with all the computing being performed in this cloud. Infrastructure. Users interact with this cloud and the storage or computation of their data is invisible to them. The three major changes that Cloud Computing brings are around Rapid / Near Zero Implementation Timelines. Many FIs. integration and services are all virtualized and made available to the user community in a matter of seconds on a flexible usage based payment mode. as touted by many. versioning and migration of applications The prospect of a huge initial investment combined with the high running costs often deters the introduction and acceptance of new technology despite IT being important to an FI’s strategic advantage. Cloud computing offers FIs the capability to create a highly mobile and virtual structure and provides flexibility to scale up/ down based on demand. Cloud Computing. Utility Computing and SOA (abstraction of services from applications and abstraction of applications from platforms and infrastructures) Current Challenges @ Financial Institutions Most Financial Institutions (FI) face problems in either trying to set-up/ scale-up IT infrastructure. What it means for Financial Institutions? Cloud services have challenged the traditional nature of Financial Institutions. Grid Computing. The bulk of IT budgets are often swallowed up in: ? Maintaining huge storage & processing facilities ? costs for software License ? Deployment. Implement. Pay per Usage. They get caught up in the technology while failing to realize that the end users of any technology are primarily interested in using the technology rather than being bothered about its internal workings or how it is delivered to them. is not just an alternative delivery model or alternate way in which enterprises will buy IT services. cloud services claim to provide solutions for a majority of IT requirements ranging from e-mail and Web hosting to fully managed applications as well as vast on-demand computing resources. Cloud computing in simple terms is about Virtualizing / abstracting everything (XaaS).Introduction About Cloud Computing Ever changing IT world has resulted into plethora of alternate delivery models that have enabled business for organizations. IT will become a complete Service and the whole concept of Plan. . Cloud Computing aligns (extends) itself well with the major technological / delivery model innovations in IT Space – be it ASP. do not utilize the available resources to their optimum capacity. Run and Optimize will collapse into a single block of Service – called Cloud Computing. applications.

and the protection of Security: data from intentional or accidental loss or leakage is vital both for operational and reputational reasons. This concern is accentuated with the recent catastrophic data loss event that ‘Magnolia’ experienced Not surprisingly large FIs tread carefully when it comes to the adoption of cloud services. Charges are applied based on the usage of services. Whosoever wants to upgrade or avail of a service can do so from the Cloud. ? Dependence on constant connectivity: FIs need uninterrupted and high bandwidth for seamless connection to the cloud. several countries have laws around the location of data. Interruption in connectivity would result in a severe outage for the entire FI. Some of the issues which FI’s should take in consideration before utilizing the cloud services are details about users who would be able to access the data. which may take away some of the flexibilities of the cloud model. Potential Thunderstorms There are some key concerns that need to be addressed before FIs decide to adopt Cloud Computing. How and when a backup is taken is not in the hands of the FIs but that of the providers. Cloud computing services enable FIs to overcome silos by creating a single hub. This prevents expenditure on temporary needs or expenditure on infrastructure in case of scaling up of operations. level of encryption for data communication and storage. and there have to be mechanisms for ensuring this. ? Financial information of transactions and customers are critical to a FI. The systems management component controls the provision of the tools for accessing the servers. management and integration. disaster recovery and business . Moving applications and data across providers might create problems especially if it is not a smooth transition. ? Legal issues/Privacy: In case a government agency wants to access the data for surveillance or antiterrorism purposes or a court orders the disclosure of data which users had considered private hitherto. does the cloud adhere to regulatory compliance. regulations demand that historical data be preserved for certain periods. the latest example being a US court ruling involving a Leading Swiss Bank. who will be able to hire systems on a need basis per-user. Also. location (country) of Cloud and data. The technology supports scaling up with just an internet connection & browser while all the IT assets (data and applications) are hosted in the Cloud Service Provider’s data centre. Finally. there arises a host of legal concerns. Work is platform independent due to the centralized nature of data. Superior computing power can be brought within reach of FIs.Several IT organizations within FIs are organized either based on businesses or with a combination of businesses and technologies. processing and services. Seeding the Cloud Cloud computing to a large extent depends upon the Service Providers infrastructure. It is important for FIs to gain more visibility on a service provider's policies and track record on data security before using their services. One of the reasons why FIs have been skeptical to explore cloud computing based services is that the potential cost savings are not worth the trade-offs in terms of control. Centralized enterprise level network administration is also made possible where updates and patches can be applied once and will be valid for all those connecting to the resources. ? Portability & Preservation: A FI might lose visibility of the computation being performed.

The team consists of accomplished experts who have embarked upon several initiatives and experiments towards creating a service offering around this space. Leveraging the CUDA’s success HCL created CUDA accelerated option pricing engine named ‘parafin’. CUDA speedups were found to be much more impressive than speedup on the blade processor. visibility to investigate any unethical and illegal access and ROI or value-addition generated to the FI in quantifiable terms. Based on the above experience and as part of HCL’s commitment to this emerging technology. HCL has CUDA can be easily integrated with clusters and grids that provide computing power to Cloud. HCL Cloud Architectural Framework The reference architecture consists of a base taxonomy of various cloud computing elements as shown in the diagram below. Cloud Computing @ HCL HCL has a dedicated CoE setup for this emerging technology. trinomial tree based option pricers) on IBM CELL blade processor and also on CUDA. HCL has developed an architectural framework for Cloud computing. Some of the work already done in this space is detailed below: ? conducted internal benchmark tests using the Compute Unified Device Architecture (CUDA). On redesigning the algorithm completely to suit the CUDA architecture. HCL reduced the processing time from 30 hours to 6 hours over a year by deploying a combination of hardware virtualization and re-writing the risk code to facilitate parallel processing. ? Cloud Computing CoE is working on various partnerships to provide best-of-breed solutions to its clients. Similar concerns have been echoed by experts and researchers worldwide. HCL teams have profiled a few financial algorithms (binomial tree. HCL started evaluating the various new technologies emerging in the area by around mid-2007. Looking at the price to performance ratio.continuity plans. . The re-engineering initiatives provided suitable platform for future complex valuation methodology and integration of major product areas resulted in substantial savings in regulatory capital and reduction in credit line utilizations. ? HCL’s experience with Cloud platforms and SaaS providers: HCL has been involved in providing solutions through cloud platforms like Azure for its customers. Speedups were around 40x to 60x on a GeForce 8800 GTX compared to AMD Athlon running @ 2. HCL’s solutions include creating the cloud infrastructure for cost effectiveness and on-demand scalability. ? also helped its customers in the area of grid computing that helped a leading global bank reduce HCL has its overall risk computation process. to work collaboratively in the area of grid-computing and High-performance computing using Open Source software. speedups up to 200x could be achieved. HCL has partnered with ‘The Grid Computing and Distributed Systems’ (GRIDS) laboratory of University of Melbourne. HCL is also in talks with Cloud Providers to provide end-to-end Cloud Services Solution jointly. HCL’s different Lines of Business have come together to form this architectural framework in conjunction with world renowned partners.41GHz.

A cloud application leverages The Cloud in software architecture. Thick Client – FireFox. Identity (OAuth. Others (Amazon Mechanical Turk) Public Cloud Public Cloud Platforms Database Cloud Components Network & Connectivity Infrastructure . Skype. MS Online ? Cloud Services . or which is specifically designed for delivery of cloud services.Mapping (Google Maps.Base Taxonomy: Developers Consumers Enterprise Users Enterprises User Community Cloud Management Tools Clients Applications Services Development Tools Security Private Cloud The base taxonomy consists of the following most important reference elements – ? Cloud Clients . Windows Mobile.iPhone.g. Zonbu. is "software system[s] designed to support interoperable machine-to-machine interaction over a network” which may be accessed by other cloud computing components. Yahoo! BOSS).computer hardware and/or computer software which relies on The Cloud for application delivery. E. often eliminating the need to install and run the application on the customer's own computer. and support. or end users directly..g. Software plus services. ongoing operation. Google Checkout. Integration (Amazon Simple Queue Service). Yahoo! Maps). SalesForce. Mobile. E. Facebook. ? Cloud Applications . software. Bittorent. Google Custom Search. thus alleviating the burden of software maintenance. E.A cloud service. Web Service. OpenID).g. and which in either case is essentially useless without it.g. Payments (Amazon Flexible Payments Service.g. Thin Client – CherryPal. Search (Alexa. e. PayPal)..

.Net. HCL believes that significant investments in the IT footprint in terms of infrastructure and software can be reused (in case not optimally utilized) in form of a private cloud. HCL can help clients in transforming the current IT landscape into a private cloud.HCL’s Reference Architecture User Community Enterprise Users Consumers Enterprises Developers Cloud Clients – iPhone. API Enabled Customer Business Other Cloud Services Other Non-Cloud Services Applications – Web Enabled. HCL is in the phase of developing relevant partnerships for leveraging existing ready to deploy cloud services provided by enterprises in this space. Python.0 / Web Enabled Above shown is HCL’s reference architecture framework for Cloud Computing which is based upon four main fundamentals – ? Elasticity ? Security ? Billing ? Metering Way to Go: Hybrid Cloud Environment HCL believes that. Thin Clients. Loosely Coupled.WEB SERVICES App Platform Java. HCL has also developed expertise on tools that can enable efficient service delivery for a cloud computing environment and has also developed its own IP tools in this front.Web Services – Integrated SOA driven. PHP Storage – Database. while there is merit in looking at the ready cloud infrastructure and platforms available in the market. Windows Mobile. . it is also relevant to look inwardly at a company’s own investments. Thick clients Access Internet Based . Cloud Enabled Platform . Metadata driven Infrastructure Computing & Storage Network & Security Web 2.

The cloud's ability to spin up more servers to handle this demand would be a key driver for cloud enablement. Redundant . payment services over cloud. data privacy. Workflow. Messaging) . where the bulk of key applications are already clouded. other productivity applications over cloud. utilization. in case of exchange traded Capital markets. data security amongst the other requirements mandated by the regulatory authorities. HCL believes. Financial Institutions should follow gradual steps by identifying some of the best candidates that might include applications or businesses that witness unusual spike of load at any given time. Looking for the Silver Lining Instead of a Big-Bang approach.Licenses) ? Infrastructure (including Datacenter space / power etc. a Controlled “Private Cloud Computing” model that provides all the benefits of Cloud Computing.g. there could be a case for resource clouding. While in case of Banks there is ample opportunity to explore clouding. infrastructure over a cloud. Some of the areas that could be considered are: ? Commercial Lending – Origination and Servicing ? Mortgages – Origination and Servicing ? processing Payments ? Cash Management Trade and ? Banking Internet ? Claims Processing for Insurance (P&C during Seasonal Natural Disasters) ? Risk computation ? Futures & Options Contracts Expiry of HCL Service Offerings HCL’s offerings in the area of cloud computing are detailed in the following sections. over capacity. Business Voice Services. Non-Critical.) ? Tooling ? IT Personnel Internal ? Inventory analysis (requirement. would be an ideal solution for FIs as the FI still has the ownership and visibility of its data. heterogeneity) Complete ? case development for moving to Internal / Private Cloud Business ? case development for productivity applications that can be moved to Cloud (e. The controlled cloud would adequately take care of country specific laws in terms of data storage.HCL believes that most of the organizations will lend themselves well to the concept of a Hybrid Cloud where in existing infrastructure can be transformed into a private cloud and at the same time organizations can make use of standard services available in market like Email over cloud. Hybrid Cloud enablement Services HCL Reference Methodology for Transforming existing IT landscape into a Hybrid Cloud Environment ? Financial Analysis of IT Budgets / Costs in different brackets Complete ? Applications (Critical.

HCL has built its own platform Agora . Workflow. HCL’s Cloud / SaaS Service delivery platform.g. Agora is technology neutral and integrates . The framework. billing and support. HCL has worked on enablement initiatives of top 3 out of 5 ISVs on their enablement journey. Messaging) HCL Management Services HCL provides end to end management services for efficient management of cloud. Agora.for SaaS enablement and delivery. Agora helps ISVs / Service Providers monetize their SaaS channels in weeks’ time span as opposed to months. HCL’s Agora platform helps ISVs to build their Cloud / SaaS Business. The key areas of management services are – ? Provisioning Dynamic ? requests Change ? Re-imaging ? rebalancing Workload ? De-provisioning ? Monitoring ? Metering ? Billing HCL works both on Cloud / SaaS enablement initiatives and have unique cloud offerings as described below - Cloud / SaaS Enablement HCL has worked with some of the largest ISVs in their Cloud enablement initiative. Complete with modules for aspects like customer management. Voice Services.? Start Implementation of Internal Cloud ? Time Based Dynamic Profiling of Infrastructure Usage & not just Static Snapshot Perform ? Begin Policy Based Management of the DC Infrastructure with a small step – Server Orchestration ? Policy based management of the Physical infrastructure Introduce ? Implement Capacity on Demand (Elasticity) ? Policy based management of Virtual Infrastructure Introduce ? Unify management of both physical and virtual infrastructure ? Metered Infrastructure Use Provide ? Invoke Management Policies to respond to LoB Needs ? Movement of productivity applications that can be moved to Cloud (e. which helps ISVs to adopt Cloud / SaaS based delivery rapidly. Agora helps the Independent Software Vendors (ISVs) / Service Providers ride the Cloud / SaaS wave confidently and effortlessly. built on top of a service-oriented architecture. is designed to give ISVs a head start by automating critical aspects of SaaS enablement. has been built by adopting the global best practices in software architecture. metering. Channels and manage customers. Currently HCL is working in enabling cloud based subscription based delivery for other IT enabled services. OEM & partner management.

The entire CM processes are standardized and the customer has an option to choose the tools they want to use – tools like Serena Version Manager.Handle high growth in volume of SaaS business without increasing the back-office staff to manage billing. Serena Dimensions. The tools and services can be consumed by enterprises in a pay as you go model. currency and tax rules to deliver SaaS business across the globe Supports ?online payments and process offline payments through Agora’s payment processing feature Handle ? new products / offerings through integrated web campaign and email notification systems Promote ? Proactively share critical information with customers through Agora’s notification system ? customer through Agora’s ticketing system Support ? Create and manage distribution networks through Agora’s partner management ? delivery infrastructure with partners to manage their customers. recurring. subscription. usage based Support ? periodic offers and discounts on the service Support ? multiple geographies. . CRM and other back-office applications via its Integration Service Bus which effectively protects the existing technology investments made by clients. Key Features of Agora ? Zero touch customer on-boarding and management. VSS are currently supported in this platform.seamlessly with existing ERP. billing. where Software configuration Management is delivered as a Cloud Service. IBM Clearcase. Subversion. The customer gets to pay based on his usage. payments Share the ? for multiple distribution models like fixed price and variable price models Support ? Quick three step integration with applications to be delivered in SaaS model ? Integration with back-office systems made easy through an integrated Service bus ? Highly distributed and scalable architecture to handle increase in your business efficiently Key Benefits of Agora ? Single platform that automates complete process require to run SaaS business ? Fully Integrated lifecycle management from customer registration à subscription à provisioning à metering à billing ? Highly flexible to suit the unique business needs of different types of *aaS business ? Highly scalable system. user based . billing and payment management ? customers close to real-time through Agora’s automated system provisioning and application On-board provisioning capabilities ? services quickly through simple configurations Launch ? for multiple sales models like one-time. built to linearly scale based on the growth in the volume of the business ? SOA based architecture principles for quick integration Based on Future Roadmap HCL is in the process of launching a new service called as Configuration Management as a Shared Service. delegated administration ? Scale efficiently -. payments through automated metering.complete automation of critical components of SaaS delivery and distribution like customer acquisition.