The next step
Ten years ago, cloud-hosted systems were a new frontier for commercial finance technology. At Dancerace, we were among the first to make the switch, moving our on-premise servers to the cloud in 2009.
Today, the cloud revolution is (almost) complete. It’s rare to find software that isn’t cloud-hosted. But the conversation hasn’t ended completely, and the terms ‘public’ and ‘private cloud’ feature in many in technology discussions.
Here’s why that matters, and how we’re helping banks and lenders take advantage of the future of cloud.
In a private cloud, businesses’ systems and data are hosted on a small, defined number of servers – typically one active server plus a small number of inactive backups. You can see the hardware with your information on it by visiting your private Cloud Service Provider (CSP).
Public cloud infrastructure is more flexible. Your systems and data are replicated across shared servers operating in many locations, managed by a CSP like Microsoft or Amazon Web Services. Theoretically, your information is always available, because if one server fails there are others working in the background 24/7.
In the beginning
Today, your workplace systems will use a mixture of private and public cloud hosting. Many lightweight software services are publicly cloud-hosted. Many core software services for banks and lenders remain privately-hosted, though, for good reason.
Until recently, most banks and lenders wanted to know where their data was hosted, physically . Others wanted to isolate their information from other companies’ infrastructure using dedicated servers. A small number of historic outages by AWS, Microsoft Azure and other public CSPs made many wary of using public cloud.
Coming of age
Since then, banks’ and lenders’ attitudes towards public cloud have shifted considerably.
Public cloud services have matured, the number of public cloud experts has multiplied and banks and lenders’ cloud requirements have changed. As a result, confidence in public cloud has increased and firms more clearly see the benefits of public versus private:
- Availability: When a private cloud server fails, there’s a slight delay before the backup server goes online. If no backup server is available, users are stranded. Public cloud solves the availability problem.
- Scalability: Public cloud makes it simple to replicate systems when expanding into new regions and to standardise IT operations across different geographies. Public cloud can also be more cost-effective than private systems, because public clouds scale up and down to ensure businesses only use the computing resources they need at any time.
- Sustainability: Before now, public CSPs did a poor job of improving and proving the efficiency and sustainability of their systems. This is changing – AWS, for example, provides a dashboard to show system power usage and other metrics. All cloud providers have work to do here.
In lockstep with lenders
At Dancerace, we make it our business to stay ahead of technology trends.
We foresaw that many banks and lenders would want public cloud hosting. So, we’ve spent the last three years getting ahead of the curve. Our new systems for open accounting and client onboarding are publicly cloud-hosted and all our future systems will be, too. And we’ve laid the foundations to move our backoffice and client access systems to public cloud, for when banks and lenders are ready for us to do so.
This way, we’ll be one of the first core banking platforms to be 100% publicly cloud-hosted: the next chapter in our history of innovation.
This article was originally published in the April 2023 edition of Business Money magazine (link)