International Journal of Scientific and Research Publications, Volume 4, Issue 6, June 2014

ISSN 2250-3153

Cloud Computing in Banking Services

Dr. Sheel Ghule*, Ms. Rupali Chikhale**, Mr. Kalpesh Parmar ***
*

**

Persistent Systems Limited, Nagpur

G. H. Raisoni Institute of Information Technology, Nagpur
***
Persistent Systems Limited, Nagpur

Abstract- The banking industry is facing several changes.

Control is now in the hands of the customer, rather than the bank.
Customers are driving new business models. Technology
changes the traditional business transformation. Banks need to
react to this new customer-driven environment with innovation in
business models, operations and IT. For banks, the value
proposition for cloud computing affects the entire business.
Cloud technology offers a new model for delivering innovative
client experiences, effective collaboration, improved speed to
market and increased IT efficiency.
Cloud computing provides a platform for optimizing
financial services operations while creating and delivering the
kind of innovative services that differentiate and propel your
business forward. It is agility that will be the lifeblood of
successful financial enterprises going forward, and cloud
computing is one way of gaining that agility. Cloud services
deliver revolutionary performance that empower the banking
industry to automate and manage their processes.
Index Terms- A Banking, Cloud computing, cloud, model
optimization

I. INTRODUCTION

ith the rise of existing and new, non-traditional

competition, banking faces a changing business landscape.
Satisfying customer demands has become more complex as
customers demand more convenience and control over their
banking services. At the same time, regulators are ushering in a
new era of government over-sight. Banks currently face
challenges in a number of key areas:
Capital inadequacy that depresses profit margins.
Emboldened customers who expect rapidly evolving new
services and offerings
Fierce competition for customers has spawned industry
consolidation and the entrance of nontraditional firms
Changing business models have shifted from productcentric to customer-centric.
Enhanced regulation increases government oversight and
intervention.
Increasing social and government pressure for financial
inclusion.
To drive growth and innovation in banking, it is increasingly
necessary to dramatically leapfrog the competition using IT and
business model transformation.
Cloud computing can offer financial institutions a number of
advantages, including:
A. Cost savings

B. Usage-based billing
C. Business continuity
D. Business agility
E. Green IT
But before moving to the cloud, banks must consider issues
around data confidentiality, security, regulatory compliance,
interoperability of standards, and quality of services.
Why Cloud Computing for Banks?
Cloud computing can help financial institutions improve
performance in a number of ways.
A. Cost Savings and Usage-based Billing
With cloud computing, financial institutions can turn a large
up-front capital expenditure into a smaller, ongoing operational
cost. There is no need for heavy investments in new hardware
and software. In addition, the unique nature of cloud computing
allows financial institutions to pick and choose the services
required on a pay-as-you-go basis.
B. Business Continuity
With cloud computing, the provider is responsible for
managing the technology. Financial firms can gain a higher level
of data protection, fault tolerance, and disaster recovery. Cloud
computing also provides a high level of redundancy and back-up
at lower price than traditional managed solutions.
C. Business Agility and Focus
The flexibility of cloud-based operating models lets financial
institutions experience shorter development cycles for new
products. This supports a faster and more efficient response to
the needs of banking customers. Since the cloud is available ondemand, less infrastructure investments are required, saving
initial set-up time. Cloud computing also allows new product
development to move forward without capital investment. Cloud
computing also allows businesses to move non-critical services
to the cloud, including software patches, maintenance, and other
computing issues. As a result, firms can focus more on the
business of financial services, not IT.
D. Green IT
Organizations can use cloud computing to transfer their
services to a virtual environment that reduces the energy
consumption and carbon footprint that comes from setting up a
physical infrastructure. It also leads to more efficient utilization
of computing power and less idle time.
What Is Cloud Computing?
The cloud is a paradigm shift in computing, by which
infinite computing capabilities and resources (servers, storage,
networks, applications and services) are delivered as a service to
customers using internet technologies. The Microsoft Windows
Azure platform, which serves as the foundation for developing
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International Journal of Scientific and Research Publications, Volume 4, Issue 6, June 2014
ISSN 2250-3153

and running applications in the cloud (and offers all the required
development tools, management and services from Microsoft), is
built to be flexible and give customers the ability to run the
technologies they choose and scale as necessary paying only
for what they consume. For banks, running their applications in
Windows Azure means they dont have to deal with the basics of
the operating system. They have automatic scalability and
automatic failover as well as disaster recovery, without having to
actively manage and maintain the technology themselves. For
smaller banks in particular, cloud computing is the most costeffective IT solution available on the market today, as it allows
them to benefit from the consumption-based pricing model, as
well as the scalability of Windows Azure as they grow.
Cloud computing has the capacity to change completely the
financial services landscape. By making enterprise-level banking
systems and associated technologies available in the cloud on a
pay-per-use basis, now anyone, anywhere can have access to
modern core banking systems without the cost and other barriers
usually associated with this technology.
Cloud computing is a model, not a specific technology.
Today, cloud technology is not just a tool being used in IT, but a
paradigm shift to an entirely new business model. Cloud
computing, allows companies to access IT-based services via the
internet. A cloud-based model provides rapid acquisition, low
capital investment, relatively low operating costs and variable
pricing tied directly to use. Cloud computing services operate at
several levels: infrastructure as a service, software as a service,
platform as a service and business process as a service. There are
several different flavors of cloud, each bringing its own
specific implications for banks.

The main variants are:

Public clouds
Public clouds extend the data centers capabilities by
enabling the provisioning of IT services from third-party
providers over a network. The data and processing may be
located anywhere in the world on infrastructure that is shared
with the cloud providers other customers, or tenants.
Private clouds
Private clouds are built by applying virtualization within a
banks own data centers. Because private clouds are not exposed
to external tenants, banks tend to regard them as a more secure
environment for customer data.
Hybrid clouds
Hybrid clouds blend public and private clouds depending on
the sensitivity of the data and applications in each process, and
the degree of business criticality and differentiation. Most banks
will follow a hybrid cloud strategy which can also be a cloud
owned by and located within the bank, but operated by a thirdparty.
Public sovereign cloud
Public sovereign cloud is an emerging variant, under
which a public cloud provider commits to keeping the cloud data
and processing within a specific jurisdiction. This facilitates
compliance with data protection regulations forbidding personal
data from passing beyond national borders.

II. DEPLOYMENT VIEW OF CLOUD BANKING

Fig. Deployment Module

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International Journal of Scientific and Research Publications, Volume 4, Issue 6, June 2014
ISSN 2250-3153

The all service layers, regardless of deployment model

(private, hybrid, and public), a banking sector must implement a
consistent model to govern, provision, and operate activities
across all layers. This encompasses provisioning not just the
infrastructure, but all components and services required to deploy
the bank service, for example, hardware, network services,
operating system, database, middleware, application, and thirdparty service provisioning.
Infrastructure ServicesIncludes servers, storage, and
networking, both inside and outside a banking services for data
center. Many banks are currently building an internal cloud IT
infrastructure. This layer is often called IaaS.
Platforms ServiceA broad technology array, including
application hosting environments and tools, middleware
technology, development frameworks and tools, and standards
applied to specific business services. Even a core banking
product includes a development environment such as
frameworks, scripts, languages, tools and deployment
environment such as deployment scripts, monitoring, and control
environment.
Business ServicesCore bank services[5] such as corporate
and retail banking, wealth management, treasury management,
risk management and compliance, trading.
Banks have built these services in-house, the market is replacing
these systems with commercial off-the-shelf packages that
embrace an SOA. Some business services, such as loan
origination and payments, are consumed through an external
service provider.
Channel ServicesSupport diverse channels such as ATM,
branch, call center, mail, mobile, online, telephone, video, etc.
The services are tailored per channel, built on a channel-specific
technology stack with some sharing across channels via bridging
technology. As the number of channels, devices, and users
explode, banks evolve toward single architecture that supports all
channels, delivering a consistent customer experience, services,
and information across all channels.
Security (Authentication, Authorization and Access
Control) the critical need for security, privacy, and control in
a cloud environment. For applications that need lower levels of
security and control, a public cloud may suffice. Where more
stringent levels of security and control are called for, a private
cloud is the logical choice. For more sensitive banking sector
services applications, which call for higher levels of privacy and
control, retain them on their existing environment, or consider a
utility services solution, or traditional managed hosting services
approach.
ScalabilityThe Cloud service that provide real-time
visibility into resource utilization, operation performance,
patterns for CPU utilization, disk I/O, and network traffic.
Enabling employees across distributed branches to access trading
and banking systems through a security-rich cloud infrastructure
Benefits of Cloud Computing in various banking IT service
areas:
Analytics: Integrating customer data across banking
platforms to enable near real-time insights.

Collaboration: Enabling employees across distributed

branches to access trading and banking systems through a
security-rich cloud infrastructure
Cost Savings and Usage-based Billing: With cloud
computing, financial institutions can turn a large up-front capital
expenditure into a smaller, ongoing operational cost. There is no
need for heavy investments in new hardware and software. In
addition, the unique nature of cloud computing allows financial
institutions to pick and choose the services required on a pay-asyou-go basis.
Desktops and devices: Deploying a private cloud to
centralize management of desktops allows for greater remote
flexibility without sacrificing control, while enabling banking
employees to access the applications and data they need
Development and testing: Enabling a banks development
teams to quickly and easily create virtual environments thus
increasing the agility of development and testing
Industry applications: Enabling payment providers to
standardize and modernize transaction processing
Infrastructure compute: Allowing capacity to be allocated,
expanded and reallocated efficiently gives banks flexibility and
agility while resolving the issues of complexity and cost
increases related to scaling up traditional network models to
accommodate future growth
Infrastructure storage: Providing scalable storage solutions
to ensure that the real-time demands of today's trading and
analytics processes are maintainable
Managed backup: Backing up a banks critical business
data to ensure that in the event of a disaster a bank can bounce
back rapidly and easily
Security: Enforcing active security and endpoint
management to ensure corporate governance and banking IT
policies are maintained

III. CONCLUSION
While banks will benefit in a similar way to other cloud
users from this particular offering, especially in terms of lower
total cost of ownership, enhance their operations and help them
develop new offerings with flexibility and a rapid time to market.
Cloud computing may soon prove indispensable as an answer to
the daunting new demands for agility, transparency, and
efficiency. Shrinking markets and global competition pose
numerous challenges for banks the Cloud offers the speed,
flexibility and real-time information needed to meet those
challenges on a cost-effective basis.
Global economic situation to more stringent regulatory
controls, nimble new competitors, and shifting Customer
expectationsbankers and others now face a dramatically
different market reality. Banks must collaborate and technology
must be part of that collaboration. We successfully integrated on
promise and cloud-deployed bank sector for web service. The
benefits can include not only lower costs, but increased revenue
and optimized customer relationships. Cloud computing
represents game-changing shifts in how banking services
organizations acquire and leverage IT resources. Cloud
computing also provides a high level of redundancy and back-up
at lower price than traditional managed solutions. The Cloud
vendor provided infrastructure services are used to address
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International Journal of Scientific and Research Publications, Volume 4, Issue 6, June 2014
ISSN 2250-3153

scalability, performance, security, availability, disaster recovery,

monitoring requirements of the systems.

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AUTHORS
First Author- Dr. Sheel Ghule, Ph.D., M.C.M., B.Sc. (CS).
Persistent Systems Limited, Nagpur. Email:
[email protected]
Second Author - Ms. Rupali Chikhale, M.C.A., B.Sc. (CS), G.
H. Raisoni Institute of Information Technology, Nagpur. Email:
[email protected]
Third Author - Mr. Kalpesh Parmar, M.Sc. (CS), B.Sc. (CS).
Persistent Systems Limited, Nagpur. Email: [email protected]
Correspondence Author- Dr. Sheel Ghule, Email:
[email protected], [email protected], M9422135947

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