BBVA API Market
For some years, the huge advantages of the public cloud made it the best option for any company, mainly due to the important matter of storage cost. But, actually, over time it has been different. Most companies, especially in complex sectors like the banking industry, have strengthened their position in the hybrid cloud. They have also shifted toward Service as a Platform (PaaS) models, also private, even if they keep part of their services in public PaaS.
When a company looks at whether to go for a public, private or hybrid PaaS model, some points taken into special consideration include:
● The data. A large volume of data creates opportunities, and also some problems. The public cloud brings down storage costs greatly, but also has its drawbacks when the level of storage required for the information is excessively large. Moving this huge volume of data from proprietary systems over to public ones is not an easy task. Also, often the platforms or applications developed by a bank or a company depend on external systems that cannot be moved over to the public cloud or integrating them proves to be highly complex.
● Performance. I/O performance is a key factor taken into account in an IT team’s decisions. Any PaaS strategy depends on the performance of services provided to third parties.
● Security. Some market providers, especially those who specialize in providing private PaaS services, believe that the public cloud cannot guarantee minimum security requirements for banking. Other alternatives that some banks have opted for are open-source solutions with dependency insurance polices against the provider.
OpenStack, the alternative for several banks
OpenStack is a cloud computing project to provide Infrastructure as a Service (PaaS), which underlies the Platform as a Service model (PaaS). It is an open-source solution, which is distributed under an Apache license. OpenStack has been managed since 2012 by the OpenStack Foundation, an organization with 30,000 members in 170 countries.
Leading companies from the financial sector, such as Wells Fargo, Bank of America, American Express and BBVA, have opted for its services. The most recent bank to take a similar decision was Barclays. In mid-2015 it choose OpenStack to manage its private cloud with an initial integration that affected more than 100,000 servers, with hundreds of service applications for its customers.
OpenStack offers banks two advantages to compete in the world of banking: the flexibility, speed and scalability of open-source solutions; and the security and privacy required in the financial sector provided by a private cloud computing solution. The BBVA IT team’s technology roadmap followed these five steps:
With OpenStack BBVA had its sights on an infrastructure that met four requirements:
● Infrastructure in the private cloud for BBVA’s internal networks, similar to those provided by cloud companies like Amazon and Google.
● Cultural and technological change within the company. Different approach.
● Automated processes: deployment, network, security…
● Implementation of applications in multicloud.
Bank of America is another bank to choose OpenStack to migrate part of its internal infrastructure and with proprietary providers to this open-source solution. Although the company encountered some problems in 2015 with the migration of 6,500 SDDC technology workloads from one infrastructure to the other, it seems that those incidents were eventually solved.
The initial plan of the company’s CTO, David Reilly, was to move 1,500 workloads a month over to OpenStack, out of a total of 70,000 in a company with more than $21 billion in assets. In 2016, the plan includes migration of workloads from IT systems and also from CRM (customer relation management).
The case of JP Morgan Chase and Apprenda
Any change at JP Morgan Chase can be a real headache. With financial assets valued at $25 billion, this investment bank is one of the biggest in the world. Indeed, in 2010 it was noticed that its IT infrastructure was causing operating and performance problems for the company and, consequently, for millions of customers. It was then that they decided to migrate applications, servers and the work of hundreds of developers to a private PaaS solution provided by Apprenda.
So why did Ian Penny, then Managing Director, Distributed Engineering & Architecture at JP Morgan Chase, and now Infrastructure CTO at Barclays, make such a decision? His reasons were:
● Excessively long delivery times because the deployment of applications, due to the company’s infrastructure and software compilation and verification system, was very slow. No flexibility.
● Inability to manage scalability needs.
● Costs due to underutilization of the physical and virtual infrastructure.
● Poor management of DevOps teams, obliged to repeat processes.
The change brought about some competitive advantages for JP Morgan Chase:
● 70% increase in use of infrastructure.
● 700% growth in productivity of development teams.
● Delivery times improved by 50 days.
● The private PaaS with Apprenda hosts more than 2,000 applications with no increase in storage and resource management costs.
Traditional banks are making the commitment to BaaS models, open banking is driving digital financial services, regulatory bodies are increasing scrutiny when it comes to BaaS providers, the banking ecosystem is rapidly changing and increased competition and regulatory pressures are expected in the BaaS sector. The State of Banking-as-a-Service (BaaS) is a report prepared by […]
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