Cloud Computing for Financial Institutions

Vivek Kejriwal

Business Solutions Group Retail and Corporate Banking HCL Financial Services

do not utilize the available resources to their optimum capacity. often. Implement. What it means for Financial Institutions? Cloud services have challenged the traditional nature of Financial Institutions. Usage based granular payment services and massive scalability. Build. Cloud computing in simple terms is about Virtualizing / abstracting everything (XaaS). . The three major changes that Cloud Computing brings are around Rapid / Near Zero Implementation Timelines.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 offers FIs the capability to create a highly mobile and virtual structure and provides flexibility to scale up/ down based on demand. is not just an alternative delivery model or alternate way in which enterprises will buy IT services. The bulk of IT budgets are often swallowed up in: ? Maintaining huge storage & processing facilities ? costs for software License ? Deployment. Cloud Computing. 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. Pay per Usage. It is a complete paradigm shift from the way IT is perceived by enterprises as well as service providers. 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. Users interact with this cloud and the storage or computation of their data is invisible to them. 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. 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. Run and Optimize will collapse into a single block of Service – called Cloud Computing. Many FIs. Touted as one of the most important technology shifts in recent times. applications. 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. SaaS. platforms. 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. Cloud Computing aligns (extends) itself well with the major technological / delivery model innovations in IT Space – be it ASP. Grid Computing. Infrastructure.

the latest example being a US court ruling involving a Leading Swiss Bank. This prevents expenditure on temporary needs or expenditure on infrastructure in case of scaling up of operations. does the cloud adhere to regulatory compliance. Potential Thunderstorms There are some key concerns that need to be addressed before FIs decide to adopt Cloud Computing. 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. ? Dependence on constant connectivity: FIs need uninterrupted and high bandwidth for seamless connection to the cloud. level of encryption for data communication and storage. The systems management component controls the provision of the tools for accessing the servers. Charges are applied based on the usage of services. Finally. Also. Cloud computing services enable FIs to overcome silos by creating a single hub. disaster recovery and business . Superior computing power can be brought within reach of FIs. which may take away some of the flexibilities of the cloud model. 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. there arises a host of legal concerns. Interruption in connectivity would result in a severe outage for the entire FI. ? Financial information of transactions and customers are critical to a FI. Moving applications and data across providers might create problems especially if it is not a smooth transition. 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. 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. 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. who will be able to hire systems on a need basis per-user. 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. regulations demand that historical data be preserved for certain periods. processing and services.Several IT organizations within FIs are organized either based on businesses or with a combination of businesses and technologies. and the protection of Security: data from intentional or accidental loss or leakage is vital both for operational and reputational reasons. Work is platform independent due to the centralized nature of data. How and when a backup is taken is not in the hands of the FIs but that of the providers. Seeding the Cloud Cloud computing to a large extent depends upon the Service Providers infrastructure. ? Portability & Preservation: A FI might lose visibility of the computation being performed. Whosoever wants to upgrade or avail of a service can do so from the Cloud. location (country) of Cloud and data. and there have to be mechanisms for ensuring this. ? 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. several countries have laws around the location of data. management and integration.

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

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

HCL is in the phase of developing relevant partnerships for leveraging existing ready to deploy cloud services provided by enterprises in this space. Thin Clients. Python. 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. .HCL’s Reference Architecture User Community Enterprise Users Consumers Enterprises Developers Cloud Clients – iPhone.Web Services – Integrated SOA driven. Metadata driven Infrastructure Computing & Storage Network & Security Web 2.WEB SERVICES App Platform Java. Cloud Enabled Platform . .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. while there is merit in looking at the ready cloud infrastructure and platforms available in the market. 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. PHP Storage – Database. Windows Mobile. it is also relevant to look inwardly at a company’s own investments. API Enabled Customer Business Other Cloud Services Other Non-Cloud Services Applications – Web Enabled. Thick clients Access Internet Based . Loosely Coupled.Net.

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. Business Voice Services. Workflow.g. in case of exchange traded Capital markets. HCL believes. Looking for the Silver Lining Instead of a Big-Bang approach. payment services over cloud. data privacy. data security amongst the other requirements mandated by the regulatory authorities. The controlled cloud would adequately take care of country specific laws in terms of data storage. a Controlled “Private Cloud Computing” model that provides all the benefits of Cloud Computing. infrastructure over a cloud. utilization. Messaging) . over capacity. there could be a case for resource clouding.Licenses) ? Infrastructure (including Datacenter space / power etc. where the bulk of key applications are already clouded. 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. Non-Critical. Redundant .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. 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. The cloud's ability to spin up more servers to handle this demand would be a key driver for cloud enablement. would be an ideal solution for FIs as the FI still has the ownership and visibility of its data.) ? Tooling ? IT Personnel Internal ? Inventory analysis (requirement. While in case of Banks there is ample opportunity to explore clouding. other productivity applications over cloud. heterogeneity) Complete ? case development for moving to Internal / Private Cloud Business ? case development for productivity applications that can be moved to Cloud (e.

Agora is technology neutral and integrates . Agora helps the Independent Software Vendors (ISVs) / Service Providers ride the Cloud / SaaS wave confidently and effortlessly. Channels and manage customers. which helps ISVs to adopt Cloud / SaaS based delivery rapidly. HCL’s Agora platform helps ISVs to build their Cloud / SaaS Business.g.? 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. is designed to give ISVs a head start by automating critical aspects of SaaS enablement. OEM & partner management. Agora. has been built by adopting the global best practices in software architecture. HCL has worked on enablement initiatives of top 3 out of 5 ISVs on their enablement journey. The framework. Workflow. built on top of a service-oriented architecture. Agora helps ISVs / Service Providers monetize their SaaS channels in weeks’ time span as opposed to months. HCL’s Cloud / SaaS Service delivery platform.for SaaS enablement and delivery. HCL has built its own platform Agora . metering. Messaging) HCL Management Services HCL provides end to end management services for efficient management of cloud. Currently HCL is working in enabling cloud based subscription based delivery for other IT enabled services. 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. billing and support.

usage based Support ? periodic offers and discounts on the service Support ? multiple geographies. IBM Clearcase.seamlessly with existing ERP. Serena Dimensions.Handle high growth in volume of SaaS business without increasing the back-office staff to manage billing. The customer gets to pay based on his usage. subscription. 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. billing. delegated administration ? Scale efficiently -. The tools and services can be consumed by enterprises in a pay as you go model. user based .complete automation of critical components of SaaS delivery and distribution like customer acquisition. where Software configuration Management is delivered as a Cloud Service. . payments through automated metering. 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. 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. CRM and other back-office applications via its Integration Service Bus which effectively protects the existing technology investments made by clients. VSS are currently supported in this platform. Key Features of Agora ? Zero touch customer on-boarding and management. 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. recurring. Subversion.