Author, Veejay Jadhaw. Digital and cloud computing in financial services, specifically for Community Banks. Includes Design Pattern and Industry Value Proposition.

1. Digital & Cloud Computing in Financial Services
Community Banks
Veejay Jadhaw
Global Head, Core Solutions & Platforms in Cloud
Global Financial Services, SAP

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Agenda
Why Cloud Matters
Cloud Computing Deployment Models (Setting Context)
Community Use Case Examples, Design Patterns,
& Cost Impact Analysis (illustrative)
Cloud Adoption Concerns and Mitigation Approaches
Cloud Adoption in Financial Services
Summary and TCO reduction simulation

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Why Cloud Matters
Innovation versus IT Run Cost - Paradox
Typically approx. 70% - 90% of IT cost is allocated
to running the banks current technology landscape,
impacting banks ability to invest in innovation.
Cloud Computing will be Omni-Present
Cloud computing’s most disruptive impact will be
changing they way consumers research and buy
financial services by offering banks the capabilities
to easily leverage social and mobile media to
improve banking experience, particularity for the
millennials, e.g. mint.com.
Standardization and Simplification:
Banks need to focus on industrializing their IT &
business processes to reduce Cost-To-Income Ratio
and Improve Agile and Speed to Market to compete
effectively.
By 2016, poor return on equity will drive more than 60% of financial services worldwide to process a majority of
their transactions in the cloud - Gartner

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Cloud Deployment Models
Resources are
shared between
organizations. The
cloud service
provider owns and
operates the
infrastructure and
offers access via
the Internet.
Public Cloud
A cloud
infrastructure
operated solely for
a single
organization,
whether virtually
managed internally
or by a third-party.
Private Cloud
A composition of
more than one
entity (private,
public or on
premise) that
remain unique
entities but are
bound together.
Hybrid Cloud
Provisioned for
exclusive use by
a specific
community of
consumers from
organizations that
have similar,
mission, security
requirements,
policy, and
compliance
considerations.
Community Cloud

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Community Cloud Use Case
 Suitable for co-operative
banks, community banks
and credit unions with
similar mission, products,
processes, currencies, and
security policy & regulatory
requirements.
 Preserve a high security
level by means of Private or
Hybrid cloud deployment
models

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Community Cloud Design Pattern & Cost Impact Analysis

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Cloud Adoption Concerns & Mitigation in Financial
Services
 Data Privacy
 Loss of Control of Data
 Data Breach
 Security
 Compliance
 Data Privacy
 Data Retention
 Data residency
Top 3 Cloud Adoption Concerns Private / Hybrid Cloud with Encryption or
Tokenization strategy primary reasons
to manage the concerns listed below
By comparison Banking and Finance industry has mature with stringent data
protection requirements due to PCI, GLBA, FFIEC, OSFI and other related regulations
or standards.

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Cloud Adoption
Based on survey conduced by Cloud Security Alliance (CSA)
Approx. 61% of Financial Services
Institutions are developing
cloud strategy within their
Organizations. The most common
Strategies use a mix of Private,
Public or hybrid cloud deployment
models
By 2016, poor return on equity will drive more than 60% of financial services
worldwide to process a majority of their transactions in the cloud - Gartner

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Private Community Cloud Summary & TCO Simulation
 Suitable for co-operative banks, community banks and credit unions
with similar mission, products, processes, and security & regulatory
requirements.
 Evaluate all design patterns of Community Cloud, keeping a balance
between TCO and Security.
 Private / Hybrid cloud with data encryption and tokenization strategy
should be considered to manage security risks and regulatory
compliance.
 TCO simulation Example:
 Core Banking implementation would cost, e.g. approx. $xxM per
bank and additional $xxM per year per bank for on-going support
and regulatory compliance.
 Leveraging “Private / Hybrid Community Cloud” would split the
implementation, ongoing support cost and regulatory compliance
costs among all participating member banks, while each realizing
full benefits. Economies of Scale
 Simplify and standardize the operating model across all participating
members of the co-operative, thereby improving speed to market,
agility, collaboration and data consistency
TCO Summary
Illustrative

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