How the Right Cloud Migration Strategy Can Drive Business Growth for Banking & Financial Services

In today’s times, the cloud is perceived more as a business asset than just a data workspace for all the positives the technology offers to explore the full potential of data and drive a business forward. “Cloud adoption accelerated rapidly during the pandemic and will accelerate still further in the years to come,” says Paul Delory, Senior Director Analyst at Gartner. And business leaders and IT decision-makers of most modern banking and financial services enterprises have realized that they must migrate to the cloud sooner than later to adapt to such volatile economic situations and meet their organizational goals.

In this article, we will discuss the importance of building a strong cloud migration strategy to avoid problems during the migration process.

It’s All About the Strategy!

A successful cloud migration relies on well-crafted and comprehensive strategies. These strategies should cover all major aspects of the migration process, identify challenges, and guide the organization step-by-step.
Banking and financial services organizations often face challenges in getting their cloud migration strategy right – a vital step in the process of shifting to the cloud infrastructure.

Benefits of a Strong Cloud Migration Strategy

In today’s data-driven world, it is essential to have data mobility across clouds and on-premises environments. A survey by Foundry on cloud computing found that “70% of companies have accelerated cloud migration over the past 12 months.

A robust cloud migration strategy offers several benefits to an organization, including:
  • Helping to execute the migration process efficiently
  • Identifying gaps and potential problems
  • Reducing hosting and other costs by eliminating unnecessary steps
  • Enabling instant scalability and accessibility
  • Assisting in determining which workloads can be replaced or discontinued, remain on-premises, be migrated to the cloud, or rewritten.

The 6Rs of a Successful Cloud Migration Strategy

Every organization is different, so the cloud migration strategy must be tailored to meet its specific technical, functional, and operational needs and achieve its desired business goals. Here are the 6Rs of a successful cloud migration strategy that organizations can consider as guidelines during their cloud migration process:

1. Rehost (Lift-and-Shift)

Rehosting, also known as lift-and-shift migration, is when an organization moves its applications from the current hosting environment to a different one, such as from on-premises to the cloud. This is a popular strategy for financial services businesses that want to migrate quickly and without major changes to their applications.
Rehosting is fast because there is no need to modify the architecture, it is cost-effective in terms of testing and other expenses, it ensures business continuity because no significant changes are made to the applications, and it provides a good return on investment.
However, there may be drawbacks with rehosting – one may not be able to take full advantage of features of the cloud, such as scalability. Applications may experience performance issues, there may be an increased risk of vulnerabilities, and inaccurate mapping can sometimes lead to failures.

2. Replatform

Replatforming is a step beyond lift-and-shift migration. In this strategy, the basic architecture of the application remains the same, but some adjustments are made to the landscape to take advantage of some of the features of the cloud without significantly extending the scope of the project.
Replatforming keeps the migration cost low, allows the organization to migrate smaller workloads first and scale up gradually, and enables the use of features like auto-scaling and managed data processing. However, financial services organizations should bear in mind that replatforming requires some level of automation.

3. Repurchase (Drop-and-Shop)

This migration strategy involves moving away from a legacy application and replacing it with a cloud-based Software-as-a-Service (SaaS) product to maximize value. It is cost-effective and easy to execute, but the IT team may need to be trained on the new platform and abandon their old code. Additionally, the one-size-fits-all approach of an off-the-shelf product may not always work for the company.

4. Refactor

Refactoring involves changing the architecture of the current application or part of it while migrating to the cloud. This is done to improve the service or product and take advantage of cloud features. Since the application is largely rewritten for cloud compatibility, it needs to be tested carefully to avoid any performance problems in the new environment.
Refactoring is one of the most time-consuming and resource-intensive migration strategies, but when done well, it can provide the highest return on investment. After refactoring, cloud-based workloads have lower operational requirements and costs and increased scalability and uptimes.

5. Retain

At times, BFS organizations may have certain applications that simply cannot be moved to the cloud because of the way they have been coded, or due to strict compliance regulations where the company does not want to take any chances or if the application is found to be running perfectly as it is on-premise. In such cases, the company may decide to ‘retain’ the application in its present location.

6. Retire

Identifying redundant applications that are no longer needed is a smart move during cloud migration. Organizations should conduct an audit to ensure that only necessary, widely-used applications are migrated to the cloud and no resources are wasted on migrating unneeded, outdated applications. However, when retiring applications, the organization must make sure there are no interdependencies on the apps being turned off.

Are You Ready to Migrate?

Find answers to these questions.

Before migrating to the cloud, an organization should ask itself the following questions:

  • Is your organization ready to migrate to the cloud?
  • Does your business need to migrate to a cloud infrastructure?
  • Does your company have the right resources to support the move?
  • What are your organization’s cloud migration objectives and strategy?
  • In what ways would cloud migration change your organization’s work culture?
  • How will cloud migration impact your overall IT and business performance?
  • What is your organization’s budget, also the timeline?
  • Should your organization outsource cloud migration through managed service providers (MSPs)?
  • What workloads can be moved to the cloud?
  • Have you found the right cloud partner?
  • How flexible is your cloud service provider (CSP)?

Here's How to Start with Cloud Migration

It’s important for business and IT leaders to work together on the roadmap. Here are some steps to follow:
  1. Document the strategy
  2. Identify key stakeholders
  3. Calculate the overall cost
  4. Provide appropriate training
  5. Partner with cloud migration experts – this can be a game-changer.
Gartner reports that over 40% of businesses are overspending on the cloud, and that number is increasing. Working with a cloud migration partner can help you navigate the process smoothly. They have the knowledge and expertise to handle the complexities of cloud migration, including tools and techniques, licensing, optimization, and spending. With an expert on board, there is a higher chance of getting it right the first time and reaping the full benefits of cloud migration.
As a digital transformation enabler, KANINI has been driving innovation and business growth for the banking and financial services sector through successful cloud enablement. Click here to speak to our experts today.

Robert Claypool
Robert has 16 years of experience in software development and spatial data analysis. Since 2012, he has been managing our Windows and Linux cloud infrastructure on AWS and Azure, and as Director of Applications Development, he oversees systems architecture, security, and DevOps practices across the organization.
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