Cloud Native vs. Cloud Ready Solutions and Why It Matters for Banks and Credit Unions
These days, it’s cloud computing or bust! To stay competitive and select the best option for your institution, banks and credit unions must understand the various flavors of hosted solution offerings. Some platforms may bring added benefits to your financial institution in the near-term, while others may offer enhanced scalability for future gains. With these new options also comes additional market disruptions, so which is best?
In a previous blog post, we discussed the different models of cloud deployments. Today, we’re going to take a look at the various types of solutions that can be deployed in the cloud - including cloud ready and cloud native architectures - and why the distinction matters.
Cloud Ready Solutions
Similar to “cloud compatible” technology, cloud ready applications are solutions that run in static environments, and are configured for the cloud. Cloud ready applications are often built on-premise, tested, and then deployed in hosted environments.
Advantages of Cloud Ready Solutions
Cloud ready applications include the following benefits when deployed in the cloud:
- Cost savings: Financial institutions can reduce their software footprint, hardware, and IT overhead, and lower maintenance expenses.
- Increased scalability: Cloud ready applications can scale up to their individual capacity, helping financial institutions adapt to changing consumer needs quickly.
- Accessibility: Users can access data and other information from the convenience of any device connected to a network or the internet – improving operational efficiency and streamlining access.
In contrast to on-premise solutions, cloud ready platforms bring additional flexibility. However, because they often utilize a legacy architecture, these offerings may not take full advantage of a hosted environment, like those of cloud-native platforms.
Cloud Native Solutions
Now that we’ve discussed the attributes of cloud ready solutions, what does it mean to be ‘cloud native’?
Cloud native refers to applications and systems designed to operate specifically in the cloud, adhering to cloud principles, and leveraging technologies such as containerization (cloud native applications that are bundled with their code and files to run in any environment) and microservices for enhanced agility, scalability, and flexibility.
Banks and credit unions who leverage cloud native solutions capitalize on innovation, and with newer technologies, are more easily able to upgrade their existing infrastructure rather than to replace it from the ground-up.
Many believe cloud native solutions to be the next phase of cloud computing. In fact, Gartner believes their use will be prevalent in years to come, as cloud technology continues to enable newer digital and mobile experiences for consumers. In a 2021 press release, Gartner analysts estimated that more than 95% of new digital workloads will be deployed on cloud native platforms by 2025, up from 30% in 2021.
Advantages of Cloud Native Solutions
In addition to cost savings, elastic scalability, and flexibility, cloud native applications offer the following benefits:
- Reliability: Microservices and containerization operate as a failsafe in the event of a downtime where issues are isolated, and the impact is relegated to that container - without requiring the entire application be taken offline or out of service. The results: increased uptime and system reliability, and more effective testing and deployments.
- Connectivity and improved experiences: Time to market is a true differentiator. Cloud native applications leverage API-based integrations to connect systems and data stores. With an extension into different channels and web-based solutions, cloud native platforms improve user experiences and bring features and capabilities to market faster.
- Cost efficiency: Many hosted offerings are based on a subscription model – the same can be said for cloud native offerings. However, with containerization, features and specific modules may be offered, providing more options or flexible payment structures.
The Importance of a Modern Architecture in Banking
Cloud ready applications may be a great stepping stone for banks and credit unions to begin their migration to hosted offerings, but decision makers should consider cloud native solutions for long-term cost efficiency and superior scalability.
Specifically within the payments sector, the demand for more flexible technologies is ubiquitous, especially as banks and credit unions look to replace aging infrastructure with offerings that future-proof their deposit channels. Paired with these modern capabilities are solutions that scale up or down based on changing volumes of users or transactions, keeping costs at bay in today’s changing market.
A cloud native image acquisition and processing platform, Unify is patent-pending and the only solution of its kind able to address all full- and self-service deposit channels. Because of its architecture and tech stack, Unify can be deployed across the enterprise or by line of business – such as in the branch, across remote devices, or within the commercial channel. With exponential scalability and a better management of IT resources, its thin-client architecture is proven to deliver a reduced software footprint by over 90%.
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