Microservices are truly remarkable, revolutionizing the way applications are constructed, managed, and supported within the cloud environment. They play a pivotal role in the cloud-native paradigm, enabling effortless scalability of assets and proving to be a perfect fit for the fiercely competitive market. The extraordinary achievements of Monzo bank and Uber serve as compelling evidence that cloud-native and microservices architecture are undeniably the future. With a digital-first mindset, both Monzo and Uber have embraced minimal infrastructure maintenance costs, exemplifying the immense value of this approach.

Take Monzo, for instance. They have meticulously developed their core banking system from the ground up, leveraging the unparalleled flexibility and scalability of the AWS cloud infrastructure. Through the adept utilization of microservices architecture and employing container tools like Docker and Kubernetes across multiple virtualized servers, Monzo has successfully attracted a significant proportion of millennials to its customer base, owing to its streamlined and user-friendly approach. As the cloud- native approach continues to gain traction, it becomes imperative to delve into the challenges and benefits that organizations encounter when utilizing microservices, which lie at the heart of the cloud- native philosophy.

Capitalizing on the Cloud: Understanding Cloud-Native Architecture

How can organizations break free from mainframes, monolithic applications, and traditional on- premises datacenter architecture? The answer lies in adopting a cloud-native approach, which empowers modern businesses with unparalleled speed and agility.

Cloud-native applications are built from the ground up, specifically optimized for scalability and performance in cloud environments. They rely on microservices architecture, leverage managed services, and embrace continuous delivery to achieve enhanced reliability and faster time to market. This approach proves particularly advantageous for financial services, banks, and capital markets, where a robust and highly available infrastructure capable of handling high- traffic volumes is a necessity. The key components of a cloud-native approach are as follows:

• Cloud service model: Operating on the fundamental concept that the underlying infrastructure is disposable, this model ensures that servers are not repaired, updated, or modified. Instead, they are automatically destroyed and swiftly replaced with new instances provisioned within minutes. This automated resizing and scaling process guarantees seamless operations.
• Containers: Container technology forms another critical pillar of the cloud-native approach, facilitating the seamless movement of applications and workloads across different cloud environments. Kubernetes, an open-source platform, takes center stage in managing containerized workloads efficiently, with speed, manageability, and resource isolation.
• DevOps: DevOps is a methodology widely adopted in the software development and IT industry. It encompasses cultural philosophies, practices, and tools that enhance an organization’s ability to deliver applications and services at high velocity, thus enabling accelerated innovation. This approach promotes collaboration and communication between development teams and IT operations, driving efficiency and agility.
• CI/CD pipelines: Continuous Integration/Continuous Delivery (CI/CD) pipelines focus on automating and streamlining software delivery throughout the entire software development lifecycle. By integrating frequent code changes, running automated tests, and deploying applications in a consistent and automated manner, organizations can improve productivity, increase speed to market, and ensure higher quality software releases.

Lastly, microservices play a pivotal role within the cloud-native architecture. Drawing a parallel to the Marvel character Vision, microservices are fragmented and independent, similar to how Vision remains intact despite encountering multiple setbacks on his journey to becoming a superhero. Microservices function as modular and cohesive components within a larger application structure, enabling flexibility, scalability, and resilience.

By embracing cloud-native architecture, organizations can unlock the full potential of the cloud, capitalizing on its scalability, reliability, and performance. It offers a transformative approach to application development and deployment, revolutionizing the way businesses operate in the digital era.

The Game-Changing Benefits of Microservices Architecture

Microservices offer numerous advantages. Unlike monolithic applications, where all functions are tightly integrated into a single codebase, microservices provide a less complex architecture by separating services from one another.

In the ever-growing landscape of application development and testing costs, microservices are an excellent choice for fintech and financial services due to the following reasons:

• Quick scalability: Microservices enable easy addition, removal, updating, or scaling of individual services, ensuring flexibility and responsiveness to changing demands.
• Disruption-proof: Unlike monoliths, where a failure in one component can disrupt the entire system, microservices function independently. This isolation ensures that a failure in one service does not impact the overall service, enhancing reliability and fault tolerance.
• Language agnostic: Microservices architectures are language agnostic, allowing organizations to use different programming languages and technologies for individual services. This flexibility facilitates the use of the most suitable tools and frameworks for each specific service, optimizing development and maintenance processes.
• Easier deployment: Microservices enable the independent deployment of individual services without affecting others in the architecture. This decoupling of services simplifies the deployment process and reduces the risk of unintended consequences.
• Replication across areas: The microservices model is easily replicable across different areas or domains. By following the established patterns and principles of microservices, organizations can expand their architecture and leverage the benefits of modularity and scalability in various contexts.
• Minimal ripple effect and faster time to market: In monolithic architectures, introducing new features or implementing customer requests can be a lengthy and complex process. However, with microservices, new features can be developed and deployed independently, reducing the risk of a ripple effect, and enabling faster time to market. Customers can experience desired features within weeks rather than waiting for months or years.

By leveraging microservices, fintech and financial service organizations can enjoy increased agility, scalability, fault tolerance, and accelerated innovation while optimizing development and operational costs.

Why are microservices difficult to implement?

With great power comes great responsibility and so while microservices are indeed a brilliant step toward application development, there are many challenges that make it tough to handle. However, because there are multiple depedencies associated with microservices, testing microservices-based applications is not an easy task.

Here are some of the challenges that teams face when implementing microservices:

• Collaboration across multiple teams: The existence of multiple teams working on different microservices can lead to coordination challenges. Ensuring effective communication and collaboration between teams becomes crucial to maintain alignment and avoid conflicts.
• Scheduling end-to-end testing: Conducting comprehensive end-to-end testing becomes challenging due to the distributed nature of microservices. Coordinating a common time window for testing all interconnected services can be difficult, especially when teams are working across different time zones or have varying release cycles.
• Isolation and distributed nature: Microservices operate independently, which brings benefits but also challenges. Working in isolation can make it harder to ensure seamless integration and coordination between different microservices, potentially leading to compatibility issues or inconsistencies in functionality.
• Data management complexities: Each microservice typically has its own data store, leading to data management challenges. Ensuring data consistency, integrity, and synchronization across multiple microservices becomes critical to maintain a holistic view of the system.
• Risk of failure: With the increased number of services and their interdependencies, the risk of failure also amplifies. A failure in one microservice can potentially affect other dependent services, leading to cascading failures and system-wide disruptions.
• Bug fixing and debugging: Identifying and fixing bugs in a microservices architecture can be more complex than in monolithic systems. Since microservices work in isolation, debugging and troubleshooting require careful analysis and coordination among different teams responsible for individual services.

Resolving the Challenges

Microservices serve as the fundamental building blocks for modern digital products and ecosystems. Their architecture offers the flexibility to choose the language or technology for rapid and independent development, testing, and deployment.

To overcome these challenges, it is essential to address the following:

• Include specialists for every layer: Ensure the presence of experts in user interface (UI), business logic, and data layer to effectively handle the complexities of microservices architecture.
• Manage turnover effectively: Acknowledge the possibility of skilled resources leaving and establish a plan to ensure seamless transitions and quality replacements.
• Prioritize dedicated infrastructure: Ensure the availability of high-quality cloud computing and hosting infrastructure capable of handling the anticipated load and traffic, guaranteeing the optimal performance of the product.
• Implement a principled DevOps approach: Given the higher risks of security breaches in microservices, adopt a rigorous DevOps approach to enhance security measures. Secure APIs play a vital role in safeguarding data by allowing access only to authorized users, applications, and servers.
• Establish service alignment through APIs: Despite working independently, microservices are interconnected within the application structure. Therefore, it is crucial to ensure proper alignment and communication between services through well- designed APIs.
• Enable dynamic communication: Microservices should possess the ability to communicate not only in the static state but also in the dynamic state. This requirement necessitates the utilization of load balancers, DNS, smart servers, and clients.

Why Choose Magic FinServ for Cloud-Native and Microservices Excellence?

Capitalizing on the power of cloud-native and microservices architecture is crucial in today’s digital landscape. However, organizations face challenges such as re-platforming and re- factoring when implementing cloud-native applications, as highlighted by an IDC survey. To fully leverage the potential of the cloud, organizations need a partner that possesses a comprehensive understanding of cloud architecture, DevOps practices, and the architectural changes brought about by microservices to support the cloud-native model.

At Magic FinServ, we have a proven track record of successfully building and delivering digital products, web apps, and services to market using agile methodologies. Our solutions are built on a structured approach that optimizes value and ensures early wins.

By partnering with us, you can expect the following benefits:

• Break the monolithic application into microservices.
• Enable a shift from waterfall to agile with a minimum viable product at the core.
• Cost management by focusing on early wins and generating incremental value.
• Ensure operational excellence with automation with CI/CD pipelines and IAC. Enhance productivity with DevOps and Agile methodologies.
• Incorporate horizontal scaling and design for performance efficiency.
• Ensuring security is baked into the DevOps lifecycle.

If you would like to know more about you can write to us mail@magicfinserv.com

“The unknown can be exciting and full of opportunity, but you have to be involved and you have to be able to evolve.”

-Alice Bag

When it comes to hosting a website or application, banks and financial institutions, particularly medium seized nimble hedge funds and fintechs, have multiple options. Two of the most frequently used options are – commercial shared hosting and cloud hosting. While shared hosting relies on a single or distributed physical servers, cloud hosting draws on the power of the cloud, or multiple virtual interconnected servers spread across disparate geographical locations. In shared hosting, multiple users accede to sharing of the resources (space, bandwidth, memory) of a server, in accordance with a fair use policy. Cloud hosting is more modern and technologically superior, as a result, it is increasingly being sought by modern financial institutions as they navigate rapidly changing customer preferences amid disruptive market forces and escalating geopolitical rivalries to ensure seamless delivery of services every time.

Key factors to keep in mind while deciding between cloud and shared hosting

We have enumerated a few factors which will make it easier for you to decide between the two.

Performance: Website and application performance is a critical requirement. No business today would like to lose customers due to deteriorating site speed, hence website owners must consider the performance criteria while choosing the hosting. So, it is critical to question:

• Does the website and application performance degrade during peak hours?
• Does the site speed slow down and then it takes ages to get it running again?
• What is the volume of traffic expected?
• Would the volume of traffic be consistent all through or would there be peaks and valleys?
• How resource-intensive would the website/application be? Depending upon how important site performance is for your business/ product, you can opt from the two.
• Do I get real time and flexible performance analytics?

Reliability: Another key requirement is reliability. Business-critical processes cannot afford downtime. Downtime translates into a cent per cent loss for the business. It means that transactions and revenue earned are zero. It is also responsible for loss of brand value. Some studies also point out that downtime results in client abandonment. Considering the amount of time and effort it takes to acquire a customer, banks and Financial Institutions are wary of unplanned downtime.

So, questioning how your regular hosting might perform – will it snap under the weight of increased workload is advisable. It makes sense as well to know beforehand how many resources would be permanently allocated to the site (in case it is a shared hosting that you have chosen). For website or application stalling can snowball into a huge embarrassment or disruption.

Security: The security of data is of paramount importance for any organization. Data must be kept safe from breaches and cyber-attacks regardless of the costs. You must be extremely careful when you choose shared hosting, because when multiple websites have the same IP address, their vulnerability to attacks increases. It becomes inevitable then for the provider to monitor closely and upgrade the latest security patches as needed. The other option is cloud hosting.

Scalability: What if your site picks up speed or you desire to scale your online presence? What then? Can demand for on-demand scalability be met by the provider? Will the website be ready for the unexpected? What if there is a jump in workload (this depends on how much resource is permanently allocated to the site)? With cloud hosting, the biggest advantage is scalability. Cloud allows me to predict when to auto-scale multifolds, both in theory and practice.

Traffic Analytics: Cloud allows you to do traffic analytics and predict which segment of your target market or which geography is attracting more eyeballs for your offerings. You can customize analytics to suit your marketing requirements and do micro-positioning of your business. This is not possible with shared hosting or any other hosting options.

Budget: Budget is another key differentiator for organizations as they have to keep their businesses running while investing in technology. Cloud hosting is undoubtedly more expensive than vanilla shared hosting. But while shared hosting looks deceptively affordable, enterprise grade shared hosting can also be quite expensive if features and functionalities are compared side by side. Undoubtedly cloud offers advantages in the long-term from a Total Cost of Operations too. Cloud also offers several enterprise grade features that are not attached to vanilla shared hosting.

Ease of management: The key question here is – who will take care of the upkeep and maintenance costs? With organizations focusing on their core activities, who will be responsible for security and upgrade? What would happen in the case of any emergency – how safe would the data be? This has to be accounted for as well, as no one would want key information to fall into the wrong hands.

Business-criticality: Lastly, if it is an intensive, business-critical process, shared hosting is not an option because business-critical processes cannot afford disruption. If it is a new product launch that an organization is planning or a website that interfaces with the customer directly, businesses cannot go wrong. Hence the cloud is the preferable option.

Shared or cloud hosting?

When it comes to choosing between the two, shared hosting is certainly economical at a base level. It is the most affordable way to kickstart a project online. But if the project is demanding, resource-intensive, and business critical, you need to look beyond shared hosting even for a small and medium enterprise.

So, when we weigh all the factors underlined earlier, the cloud undeniably has advantages. It is a preferable option for banks and financial institutions that must ensure data security at all costs while also providing a rich user experience to their customers.

Advantage Cloud: 6 Cloud Hosting benefits decoded by Magic FinServ’s Cloud team

1. Cloud is far superior in terms of technology and innovation

Whether you are a FinTech raring to go in the extremely volatile and regulations-driven financial services ecosystem or a reputed bank or financial services company with years of experience and a worldwide userbase, there are many benefits when you choose cloud.

The cloud is one of the fastest-growing technological trends and is synonymous with speed, security, and performance.

There is so much more that an organization can do with the cloud. The advancements that have been made in the cloud, including cloud automation, enable efficiency and cost reduction. Whether it is an open-source or paid-for resource, these can be acquired by organizations with ease.

All the major cloud service providers, AWS, Microsoft Azure, and Google, offer tremendous opportunities for businesses as they become more technologically advanced each passing day. Also, cloud service providers have developed their own services that can be used by customers for solving key concerns. These native services are wide ranging starting from warehouses such as Redshift on AWS to managed Kubernetes containers on Azure Magic FinServ’s team of engineers help you realize the full potential of the cloud, with deep knowledge of AWS and Azure native services and serverless computing.

2. Security is less of a concern when you choose the cloud

Security is less of a concern compared to shared hosting. In shared hosting, a security breach can impact all websites. In cloud hosting, the levels of security are higher and there are multiple levels of protection such as firewalls, SSL certificates, data encryption, login security etc., to keep the data safe.

Magic FinServ’s team understands that security is an infallible construct in modern tech architecture. Our engineers and cloud architects are well acquainted with the concept of DevSecOps, where security is a shared responsibility and is ingrained in the IT lifecycle, and not taken care of at the end of the lifecycle.

3. Cloud offers more benefits in the longer term

Though in terms of pricing, shared hosting seems more affordable, there are several disadvantages:

• The amount of hosting space for websites/applications is extremely limited as you rent only a piece of the server space.
• The costs are lower upfront, but you lose the scalability associated with the cloud.
• Performance and security also suffer,
• For an agile FinTech, faster go to market is the key. Cloud offers you a platform where you can release products into the market significantly faster

For more on how you can evolve with the cloud, we have a diverse team comprising cloud application architects, Infrastructure engineers, DevOps professionals, Data migration specialists, Machine learning engineers, and Cloud operations specialists who will guide you through the cloud journey with minimum hassle.

4. High availability and scalability

When it comes to cloud hosting, the biggest advantage is scalability. With the lean and agile driving change in the business world, cloud hosting enables organizations to optimize resources as per need. There are multiple machines/servers acting as one system. Secondly, in the case of any emergency, cloud hosting ensures high availability of data due to data mirroring. So, if one server is disabled, there are others spread in disparate geographical locations that can ensure the safety of your data and ensure that processes are not disrupted.

Magic FinServ has consistently built systems with over 4 nines availability, being used by Financial Institutions, with provisions for both planned and unplanned downtime, thereby ensuring high availability and ensuring that your business does not suffer even under the most exacting circumstances.

5. Checking potential threats – Magic FinServ’s way

Our processes are robust and include a business impact analysis to understand the potential threat to business due to data loss. There are two key considerations we take into account, the Recovery Time Objective (RTO) which is essentially the window needed for data recovery, and RPO or Recovery Point Objective which is the maximum tolerable period during which the data might be lost. Keeping these two major metrics in mind, our team builds a robust Data Replication and Recovery Strategy aligned with the business requirement.

6. Effective monitoring mechanism for increasing uptime

We have built a robust monitoring and alert system to ensure minimal downtime. We bring specialists with diverse technological backgrounds to build an effective & automated monitoring solution that increases the system uptime while keeping the cost of monitoring under check.

7. Better cost control with shared hosting

When organizations choose shared hosting, they have better control of costs. This is principally because only specific people can commission additional resources. However, this is inflexible. We have seen that though the cloud allows greater autonomy for Dev Pods of today – allowing people to spin resources easily from the cloud; on the flip side, there are instances where people forget to decommission these resources when they are no longer required – escalating the costs needlessly. With shared hosting, the costs are predictable and definite.

8. Fail fast and fail forward – smarter and quicker learning

Lastly, for a nimble FinTech of tomorrow, you want to quickly test new products and discard unviable ideas equally fast. Cloud allows Product and Engineering teams to traverse the Idea-to- Production” cycle faster. Cloud allows Fail fast and fail forward concepts to work smoothly for a Product and Dev Pod of tomorrow. Go-to-Market becomes faster and CI/CD and Containers on Cloud allow new features to be introduced on a weekly basis or less. Organizations thus significantly benefit from smarter and quicker learning.

Big and Small evolve with the Cloud: Why get left behind?

In the last couple of years, we have been seeing a trend where some of the biggest names in the business are tiptoeing into the future with cloud-based services. Accenture has also forecasted that in the next couple of years Banks in North America are going to double the number of tasks that are on the cloud (currently 12 percent of tasks are handled in the cloud). Bank of America, for example, has built its own cloud and is saving billions in the process. Wells Fargo also plans to move to data centers owned by Microsoft and Google, and Goldman Sachs says that it will team up with AWS to give its clients access to financial data and analytical tools. Capital One, one of the largest U.S. banks, managed to reduce development environment build time from several months to a couple of minutes after migrating to the cloud.

With all the big names increasingly adopting the cloud, it makes no sense to get left behind.

Make up your mind! today!

If you are still undecided on how to proceed, we’ll help you make up your mind. As the one- size-fits approach for technology implementation is no longer applicable for the banks and financial institutions today – the nature of operations has diversified and what is ideal for one is not necessarily good for the other. But when you have to keep a leash on costs while ensuring a rich and tactile user experience, without disruption to business, the cloud is ideal.

With a partner like Magic FinServ, the cloud transition is smoother and faster. We ensure peace of mind and maximize returns. With our robust failover designs that ensure maximum availability and a monitoring mechanism that increases uptime, and reduces downtime, we help you take the leap into the future. For more, write to us at magicfinserv@gmail.com.

When organizations migrate to the cloud, they do so because the cloud promises agility, scalability, and above all cost optimization. Instead of paying upfront (Capex) for server costs and for software that is not in use, the cloud’s flexible/Opex pricing model (pay-as-you-go) ensures that organizations only pay for the resources they consume.

But organizations are in for a rude awakening, when they find themselves mired in escalating costs. The reality of cloud transition is not all rosy. Not all cloud transitions translate into cost optimization. In real life experiences we have seen that it has proved to be a costly affair. There are three reasons why the costs escalate: 

1. The lack of visibility regarding resource utilization. Organizations often pay the cloud service provider for resources that they are not consuming.
2. There are idle resources. Idle resources are an unnecessary burden and add to the costs.
3. Though the cloud is ubiquitous with new and emerging technologies, it is a specialized domain requiring expert opinion and not everyone gets it right.

Hence, there is a need to plan out the roadmap and consult with the experts to optimize cloud costs. What can you do?

Step 1# Consult the experts

You need to consult the experts who have years of experience in the domain.With our Magic FinServ Cloud Team learn how to optimize costs (cloud cost optimization). It makes no sense to do it yourself, as it is time-consuming and takes up precious resources.

What is cloud optimization?

Cloud cost optimization is a process whereby organizations figure out how to reserve capacity to avail higher discounts and optimize costs by identifying all resources that are mismanaged, idle, or redundant (temporary spin-offs) by consolidating or terminating them as the need be instead.

Why do you need experts like us?

• Overall, the migration journey whether it be of enterprise infrastructure, applications, or workloads, they are complex processes. There are numerous regulations that must be adhered to, and privacy and data security are mandatory.
• With the FinTechs struggling to find a foothold and the banks and dealing with disruptive times and increased regulatory requirements, planning the journey on one’s own is a handful.
• It takes an expert like Magic FinServ with years of experience in the financial domain and several successful cloud migrations to its credit to decode what is best for the business while ensuring quick ROI.
• While optimizing costs, our team also works continually towards reducing risk – another key variable to be kept in mind while planning the cloud journey. 
• Lastly, why waste your resources on work that can be outsourced?       

In this blog, our team have identified how banks and financial institutions can optimize their cloud costs, beginning with the setting up of a common agenda involving people and processes to eliminate waste and misuse, and how Magic FinServ helps accelerate the digital transformation project.

Step 2 # Assemble a “tiger” team

Now that the importance of getting the experts on board has been delineated, time to assemble the tiger team.

What is the tiger team? 

In one of the blogs: Cloud cost optimization: principles for lasting success, Justin Lerma and Pathik Sharma, from Google Cloud, have talked about the importance of setting up a tiger team for brainstorming how to go about with cloud cost optimization. A tiger team is a high-profile team of experts with expertise in specialized and interlinked domains who come together for resolution of a specific problem.

Do you know about Magic FinServ’s tiger team and cloud economics?

At the core of Magic FinServ’s success stories are its team of experts (our tiger team comprising of myself Giten with my cloud team) and cloud economics.

• Cloud Center of Excellence (CCoE) propelling innovation and change: Magic FinServ has assembled the best professionals from the finance and technology domains to ensure excellent outcomes for the client’s business every time. Whether it is structuring support teams or building processes from scratch, Magic FinServ’s Cloud Center of Excellence (CCoE) is at the center of it all. Our team take clients through a structured process journey, often helping them become compliant with the various quality and security standards as well.  
• Multidisciplinary team tuned in to client’s unique need: The CCoE is a centralized team. It comprises stakeholders who take care of the financial, operational, and security and compliance aspects. The CCOE plays a key role in aligning the client’s business needs and vision with a well-defined strategy in tune with enterprise-wide standards and best practices. In the process, enabling clients to gain an edge. In order to optimize costs, our cloud team of experts access and evaluate the current pattern of usage and the feature set of applications that are most prominently used to find opportunities. Our compliance and cloud security managers ensure that all regulatory obligations are met.
• An extremely client-centric ethos: As Lerma and Sharma have reiterated in their article, all stakeholders involved in the journey must hold full accountability and ensure transparency and visibility for lasting success. For when it comes to designing the set of standards for “desired service-level profitability, reliability, and performance” there are several tools and techniques for ensuing cost optimization, but ultimately, it’s the organization’s ethos that makes a difference.  With our client-centric ethos and our unwavering thrust towards innovation and security, our team ensures that your needs for accountability, transparency, and visibility are met.

Step 3 # Choose the right service provider for your requirement

It is the lure of paying-as-you-go, the OpEx model of pricing that is considered as one of the reasons why the transition to cloud is supposed to be cheaper as opposed to having deal with servers on-prem. And indeed, cloud service providers like Amazon Web Services and Microsoft Azure have a pay-as-you-go pricing model for the hundreds of cloud services being offered by them. Choosing the right service provider is another key element to be taken care of while transitioning to the cloud.  With Magic Finserv experienced team, you can be sure of which service provider is best for you.

Step 4 # Identify mismanaged resources and eliminate idle resources 

There are several reasons that organizations get it all wrong and end up with inflated bills.

• This could be due to oversight or lack of visibility. For example, instances can be rendered idle or unused when a temporary server is created by the developer for a specific task, who then forgets to switch it off. As a result, organizations are still paying a hefty amount even if they are no longer using the resource. One common operational challenge is when SIT/UAT projects are over, but resources are not released. It can be easily tackled through our cloud team by remembering to turn off SIT, UAT, DR environments when not in use.
• Let’s take another scenario where the business unintentionally pays for services that are free. Had they been aware, organizations could have easily optimized costs by using the free services provided by the cloud service provider. 
• Yet another way to optimize costs is by consolidating resources that are not gainfully utilized. Take for an instance, if a bank or financial institution is only using a CPU utilization level of 5%, it makes no sense to pay for cent percent for that computing instance usage. Our team can minimize costs with proper tagging of resources, by monitoring them and raising alerts when these are not properly utilized.
• Another way to optimize costs by terminating idle resources is heat maps. Heat map is a data visualization technique that predicts when there is maximum or minimum computing demand. Heat maps eliminate waste significantly, as businesses can switch off servers when they are idle. Our cloud experts at Magic FinServ can guide you with regards to cost savings and also help in deciding the tools for maximum cost-efficiency.   

How Magic FinServ reduced cloud costs for a client with robust governance practices and discipline

For one of our prominent clients, we have helped the customer reduce the cloud cost by establishing robust governance and discipline across the services. 

• Resource tagging and monitoring: With resource tagging, monitoring of resource utilization, and sending proper alerts when the resources are not tagged properly, our team helped the client to achieve the controls over cost.
• Reacting quickly to misuse: Magic FinServ has established a monthly review of cost & utilization reports and a weekly resource utilization review to react quickly to any misuse.
• Detecting unused/underutilized resources: The weekly review helped the customer to detect unused or underutilized resources and changed instance classes accordingly. This is a common operational challenge the client team used to face when System Integration Testing (SIT)/ User Acceptance Testing (UAT) projects are over, but resources are not released.
• Switching off: Turn off SIT, UAT, DR environments when not in use.
• Deleting unused DR databases: Deleted the unused DR databases. Reduced the instance class cost and storage cost on the DR account. (New database is created from snapshot every time DR is triggered.
• 40% cost savings achieved. Elastic Compute Cloud (EC2) and Relational Database Service (RDS) are the most expensive services. The best instances with higher configurations are provisioned during go-live or high load activities. However, our team brought them to a lower configuration during the steady-state which helped to achieve ~40% cost savings on the total cost. 

Gain competitive advantage, drive efficiency, and expedite time to market with Magic FinServ

The potential of the cloud to innovate is immense. But at the same time, organizations need to optimize cloud spending without compromising performance. It makes no sense if the budget spirals out of control. Though the cloud servicing model is clear and precise, the existence of “tens of thousands of SKUs and if you don’t know who is buying what services and why, then it becomes difficult to understand the total cost of ownership (TCO) for the application(s) or service(s) deployed in the cloud.” Magic FinServ team helps banks and Financial Institutions manage and allocate costs optimally.

Our team prioritize the identification of idle resources and ensure that businesses will save precious dollars. We have helped clients gain an edge with a proven track record of:

• More than 40% cost savings
• More than 25% reduction in malicious activity
• More than 25% increase in uptime
• More than 75% of effort saving during release & recovery process by DevOps implementation
• Reduction in response time from 5 seconds to 3 seconds
• Improved uptime and delivered savings of 50% by moving some of the workloads to cloud native
• 60% savings on storage costs

With Magic FinServ at the helm, organizations are assured of both cost optimization and efficiency. We know from experience how things could unravel in the future. Therefore, we can address the common challenges and pitfalls more accurately and precisely than the in-house teams. This leaves the CloudOps and the DevOps teams with more time for growth-oriented activities. So, is that reason enough for you to take advantage of our services and embark on a cloud journey?  If yes, then do write to us at mail@magicfinserv.com. 

The Hedge Fund industry is witnessing an unprecedented boom (CNBC) – a record high that has the market tizzy. Barclay Hedge reveals that Hedge funds made more than $552.1 billion – in trading profits alone. At the same time, the AUM swelled to 42% in the past 12 months, indicating a resurgence of investor trust despite the turbulent times that the industry had weathered earlier.  

It is evident that the rebound in the economy and government stimulus packages contributed significantly to the strong backdrop and increased investor confidence that we are witnessing today. But we cannot afford to overlook the role technology has played in allaying investor fears and enabling the industry to reach a “record high.”  

The turbulence that markets witnessed last year due to the pandemic was reason enough for many hedge funds to change gears – from manual to intelligent automation. But even earlier, the changes in the economy and new regulations had put pressure on IT teams to explore options for ensuring strategic growth while ensuring compliance. Hedge Funds that remained committed in their efforts to adopt technology were able to shake off the monotony and chaos of antiquated processes, even while others scrambled to come to terms with the new world order (post-pandemic) that required them to approach technology outsourcing vendors to meet the remote working needs. Cloud computing coupled with AI, ML, and blockchain has disrupted the world of capital markets immensely. These new technologies have not only streamlined services but ensured transparency and cost-effectiveness as well. And that’s what the investors wanted–transparency, trust, standardization, and accountability.  

Now or never – the future is cloud 

The future is in the cloud. With its “virtually unlimited storage capacity, scalability and compute facility that is available on-demand,” it offers a huge advantage to hedge funds, institutional asset managers, fund administrators who have been grappling with the data problem. John Kain, the Head of Business and Market Development, Banking & Capital Markets, Amazon Web Services (AWS) Financial Services, says that within four years of his joining AWS, he has seen a significant increase in the volumes of data being placed in the cloud. He also mentions that the sophistication of cloud-based tools used by fund managers has amplified, indicating fund manager’s confidence in the cloud to tackle the sheer scale of data used in making everyday investment decisions. Today the top drivers for Financial Institutions resorting to cloud usage are:  

• Reduction in costs from CapEx to OpEx: The burden of maintaining legacy architecture and overhead costs get resolved when you move to the cloud.   

• Amplifying the speed of technology deployment: With the cloud, updates are almost instantaneous. 
• Cutting costs of legacy maintenance; Simplifying  IT management and support: Maintenance and support are the vendor’s responsibility.   
• Induce nimbleness and scalability: Incredibly easy to add space, storage, and RAM without waiting for lengthy paperwork, as is the case with infrastructure deployment. 
• Ensure business continuity with Disaster Recovery: FIs can ensure business as usual even during critical times with the cloud as it is equipped with disaster recovery.     

This blog will discuss what has fundamentally been the biggest disrupter of the decade – the cloud and its benefits. Apart from the private cloud, there are also public and hybrid cloud models. Financial institutions must plan before shifting from on-prem to cloud.  Many choose a SaaS-based approach. Certainly SaaS platforms on cloud are more fruitful compared to migrating legacy platforms to cloud as it delivers immediate business results. For a short or medium period of time, some satellite applications might go to cloud before going full-on SaaS. All facilitated by DevOps practices since that enables faster changers and fewer errors. 

So it adds strategic value if you have a partnership with a third-party vendor with experience handling cloud transformation journeys, specifically for FI’s.   

Choosing your Cloud – Public, Private, Hybrid  

Public cloud – open and affordable 

The public cloud infrastructures like Azure, AWS, and Google Cloud offer highly compelling incentives and advantages for hedge funds and asset management firms, including small firms like family offices, thus leveling the playing field immensely. Flexibility and ease of deployment are persuasive drivers when it comes to choosing the public cloud model. In addition to this, the costs of this model are readily acceptable to even small players.  

The most popular public cloud offerings for financial institutions include ancillary systems like cloud-resident office suites such as Microsoft Office 365, customer relationship management systems (CRM) like Salesforce, Market research systems, and HR systems. 

Limitations of public cloud:  

Despite some of these obvious advantages, some big financial institutions remain unwilling to outsource their core banking structures and much of their mission-critical systems into the cloud, where there have been some highly publicized security and data breaches in the past. 

The concern arises from the financial institution’s fiduciary responsibilities to its customers. If any financial/sensitive data gets leaked/compromised, the financial institutions face significant liabilities resulting from identity theft, fraud, and other malicious acts. However, this doesn’t mean those large financial institutions aren’t invested in public cloud solutions. They are raising significant engagements with public clouds but in areas that promote collaboration among employees and departments that help them reduce the costs of internal IT.  

Apart from security, scalability was another primary concern. The File sharing Tools and Services are not scalable due to rising costs, and as the firm grows, it (the firm) requires more than file sharing among a small group of people. In due time, a growing firm needs CRM, OMS, accounting tools, etc., which File Sharing tools cannot accommodate.  

Private cloud – In-built disaster recovery and high performance  

The private cloud has been the go-to option for financial and investment firms requiring business-class IT infrastructure. With its inherent security, privacy, and performance, it provided a seamless experience. In addition, a private cloud allowed the firm to exercise greater control over network traffic in terms of security, service quality, and availability. In most cases, the private cloud is operated professionally by a service provider based solely on controlling, managing, and maintaining the network to satisfy business requirements and compliance directives. Thus, businesses benefit from seasoned industry professionals with expertise who live & breathe private financial IT. 

If security and high-performance matter most, then it is the private cloud that is best. You do not have to invest in disaster recovery with a private cloud as it is already in-built into the cloud offering. 

Hybrid cloud – a mix of private and public 

Hedge funds, Asset managers, and other investment firms need not take an either/or approach to their IT infrastructures. Hybrid clouds – defined as a composition of two or more clouds that remain unique entities but are bound together – are the most popular choice today. Through a hybrid cloud solution that blends many of the public and private cloud’s most compelling characteristics and features, firms can utilize a unique, flexible, and scalable platform that serves a wide variety of the firm’s needs while keeping all regulatory compliance and security measures intact. In addition to the combined benefits, the beauty of the hybrid cloud is that it supports a slow transition, too, as risk is mitigated, compliance requisites are understood, and budgets get approved. As per the Hedge Fund Journal, “this is where working with a trusted cloud provider can add value to the process and ensure the benefits of hybrid cloud are realized.” 

Any talk about hybrid cloud would be incomplete without mentioning APIs and API orchestrators like Postman, which are gaining ground for facilitating app to app conversations, and DevOps and other Orchestrators given that the next-gen Dev environment on Cloud would be underpinned by tools such as Terraform, Ansible, Octopus etc. These automate the “Integrated Pod” structure, starting from rapid fire spin up/down of infra, testing out code, and automated code deployment/integration, saving time and effort.     

Why cloud? 

More control and less chaos with cloud  

Cloud technology has unequivocally also changed the way that hedge funds run their operations today. It is not an exaggeration to say that the public cloud, led by the growth of Amazon Web Services and Microsoft Azure, has been a game-changer and arguably has allowed small hedge funds to compete on a level playing field. The cloud with its capability to support front, middle and back-office functions – from business applications to data management solutions and accounting systems is one of the most powerful assets for the 10,000 odd hedge funds spanning the globe today, as the demand for seamless, scalable, and efficient IT solutions grows exponentially. With the cloud, organizations have more control over their processes. Data management and storage also become less of a concern when one moves to the cloud.     

Innovation begins with cloud   

The advantages of cloud-based solutions are many and go beyond cost efficiency and access to highly scalable storage and computing power. The most significant benefit that the cloud offers hedge funds is that it quickly opens the doors for new opportunities. Let’s take the example of Northern Trust, which uses its novel cloud-based platform to update client systems 20 times in a month or more, even as competitors struggle to update their clients’ systems on a quarterly or annual update cycle.   

Elaborating how the cloud-based platform mitigates risks, Melaine Pickett, Head of Front Office Solutions, Northern Trust says, “That de-risks the releases for our clients – because we’re not releasing huge chunks of code and hoping nothing goes wrong – and it also makes us able to iterate very quickly because we’re not waiting until the next quarter or next year to add new features or make other changes.” 

Leveling the playing field with cloud-based SaaS   

The one with the next big idea leads the race in today’s digital world. We have examples like Kakao bank of South Korea which onboarded millions of customers in a week – thanks to its extremely powerful platform – who have proven that small can be powerful. As Ranjit Bawa, principal and U.S. technology cloud leader with Deloitte Consulting LLP says, “Innovation can’t be mandated, but innovative teams can be empowered with tools that let them test the waters on their own.” And the cloud is one such medium.   

To quote Bawa, “the cloud democratizes the ability to test great ideas and bring them to life.” And by doing so, it levels the playing field for emerging managers – who are high on ideas and innovation. Though constrained due to bandwidth and headcount, cloud platforms provide them tremendous opportunity to test out new ideas.    

Cloud as a part of Business Continuity Plan 

Last year, small and big hedge funds suffered due to an unforeseen crisis – the coronavirus pandemic. Nobody had expected to be in the midst of a situation where remote working would be the only option. Firms that had invested in the cloud infrastructure could wriggle out of the crisis relatively unscathed, but others were forced to rethink their strategy. The days of over-reliance on manual labor were over. As a part of the business continuity plan (BCP), firms were forced to either implement a cloud-based infrastructure or work with a technology vendor like Magic FinServ to meet their IT and software needs.    

 The future however is multi-cloud  

Paradoxically the over reliance on separate cloud environments has led to silos again. So we have data developers, IT teams, cloud architects, and security teams with diametrically opposite business and technology requirements working in silos. VP Marketing, VMWare cloud, Matthew J. Morgan (Forbes) reports organizations are no longer relying on a single-vendor IT environment for cloud. Instead, the typical practice (in all organizations that he has worked with) consists of relying on a heterogeneous mix of cloud providers that necessitates a rethink of the “cloud strategy to ensure cohesiveness”. As the proliferation of separate cloud environments has resulted in the creation of new silos in the IT organization.” 

Hence – the need for a multi-cloud strategy. Morgan, in his Forbes article, states that the  “multi-cloud strategy and quick implementation was and continues to be a priority for the advancement of the business and the cohesiveness and security of the technology.” 

That multi-cloud is the future leaves no one in doubt. We are already witnessing organizations relying on a mix of multiple public cloud providers (AWS and Azure) working together to resolve businesses’ specific needs. Also, businesses are not seeing high value in having private data centers, and so we are hearing about more and more FIs publicly talking about adopting a multi-cloud approach. This is also important from a regulatory perspective, as firms will not benefit from relying solely on one cloud provider. 

Magic FinServ – your trusted cloud transformation partner 

As a trusted cloud partner, we service FI’s, including investment banks, hedge funds, fund administrators, asset managers, etc. While the journey might seem daunting at first, with a partner like Magic FinServ –  an expert in assessment, design, build, migration, and management of cloud for leading Financial Institutions – you can be assured of the desired results.  

We deploy new-age technologies like AI and Machine Learning to reduce the time-to-market, add security layers using the Infra-as-a-code approach, diminish system redundancy, and continuously narrow down the cloud deployment and monitoring costs. Our Opensource framework approach enables agility and cloud-agnostic development as well.  

We have worked with Tier 1 investment banks, top-tier hedge funds with up to 10B AUM, fast-growing SaaS companies from fintech and insuretech, and blockchain enterprise platforms. We cater to organizations of various sizes across the globe, serviced out of our offices in New York and Delhi.  

If you are looking for a financial services specialized cloud service provider, Magic FinServ is your ultimate answer. You can book a consultation by writing us mail@magicfinserv.com. You can also download our ebook for other information.  

“Worldwide end-user spending on public cloud services is forecast to grow 18.4% in 2021 to total $304.9 billion, up from $257.5 billion in 2020.” Gartner

Though indispensable for millennial businesses, cloud and SaaS applications have increased the complexity of user lifecycle management manifold times. User provisioning and de-provisioning, tracking user ids and logins have emerged as the new pain points for IT as organizations innovate and migrate to the cloud. In the changing business landscape,  automatic provisioning has emerged as a viable option for identity and user management.        

Resolving identity and access concerns

Identity and access management (IAM) is a way for organizations to define user’s rights to access and use organization-wide resources. There have been several developments in the last couple of decades for resolving identity and access concerns (in the cloud). 

The Security Assertions Markup Language (SAML) protocol enables the IT admin to set up a single sign-on (SSO) for resources like email, JIRA, CRM, (AD), so that when a user logs in once they can use the same set of credentials for logging in to other services. However, app provisioning or the process of automatically creating user identities and roles in the cloud remained a concern. Even today, many IT teams register users manually. But it is a time-consuming and expensive process. Highly Undesirable, when the actual need is for higher speed. Just-in-Time (JIT) methodology and System for Cross-domain Identity Management (SCIM) protocol ushers in a new paradigm for identity management. It regulates the way organizations generate and delete identities. Here, in this blog, we will highlight how JIT and SCIM have redefined identity and access management (IAM). We will also focus on cloud directory service and how it reimagines the future of IAM.     

1. Just-in-Time (JIT) provisioning

There are many methodologies for managing user lifecycles in web apps; one of them is JIT or Just-in-Time. In simple terms, Just-in-Time (JIT) provisioning enables organizations to provide access to users (elevate user access) so that only they/it can enter the system and access resources and perform specific tasks. The user, in this case, can be human or non-human, and policies are governing the kind of access they are entitled to. 

How it works    

JIT provisioning automates the creation of user accounts for cloud applications. It is a methodology that extends the SAML protocol to transfer user attributes (new employees joining an organization) from a central identity provider to applications (for example, Salesforce or JIRA). Rather than creating a new user within the application, approving their app access, an IT admin can create new users and authorize their app access from the central directory. When a user logs into an app for the first time, those accounts are automatically created in the federated application. This level of automation was not possible before JIT, and each account had to be manually created by an IT administrator or manager. 

2. System for Cross-domain Identity Management (SCIM) 

SCIM is the standard protocol for cross-domain identity management. As IT today is expected to perform like a magician -juggling several balls in the air and ensuring that none falls, SCIM has become exceedingly important as it simplifies IAM. 

SCIM defines the protocol and the scheme for IAM. The protocol defines how user data will be relayed across systems, while the scheme/identity profile defines the entity that could be human or non-human. An API-driven identity management protocol, SCIM standardizes identities between identity and service providers by using HTTP verbs.

Evolution of SCIM

The first version of SCIM was released in 2011 by a SCIM standard working group. As the new paradigm of identity and access management backed by the Internet Engineering Task Force (IETF), and with contributions from Salesforce, Google, etc., SCIM transformed the way enterprises build and manage user accounts in web and business applications. SCIM specification allocates a “common user schema” that enables access/exit from apps.  

Why SCIM? 

Next level of automation: SCIM’s relevance in the user life cycle management of B2B SaaS applications is enormous.   

Frees IT from the shackles of tedious and repetitive work: Admins can build new users (in the central directory) with SCIM. Through ongoing sync, they can automate both onboarding and offboarding of users/employees from apps. SCIM frees the IT team from the burden of having to process repetitive user requests. It is possible to sync changes such as passwords and attribute data. 

Let us consider the scenario where an employee decides to leave the organization or is on contract, and their contract has expired. SCIM protocol ensures that the account’s deletion from the central directory accompanies the deletion of identities from the apps. This level of automation was not possible with JIT.  With SCIM, organizations achieve the next level of automation.

3. Cloud Directory Services

Cloud directory service is another category of IAM solutions that has gained a fair amount of traction recently. Earlier, most organizations were on-prem, and Microsoft Active Directory fulfilled the IAM needs. In contrast, the IT environment has dramatically changed in the last decade. Users are more mobile now, security is a significant concern, and web applications are de facto. Therefore the shift from AD to directory-as-a-service is a natural progression in tune with the changing requirements. It is a viable choice for organizations. Platform agnostic, in the cloud, and diversified, and supporting a wide variety of protocols like SAML, it serves the purpose of modern organizations. These directories store information about devices, users, and groups. IT administrators can simplify their workload and use these for extending access to information and resources.

Platform-agnostic schema: As an HTTP-based protocol that handles identities in multi-domain scenarios, SCIM defines the future of IAM. Organizations are not required to replace the existing user management systems as SCIM acts as a standard interface on top. SCIM specifies a platform-agnostic schema and extension model for users and classes and other resource types in JSON format (defined in RFC 7643). 

Ideal for SaaS: Ideal for SaaS-based apps as it allows administrators to use authoritative identities, thereby streamlining the account management process.

Organizations using internal applications and external SaaS applications are keen to reduce onboarding/deboarding effort/costs. A cloud directory service helps simplify processes while allowing organizations to provision users to other tools such as applications, networks, and file servers. 

It is also a good idea for cloud directories service vendors like Okta, Jumpcloud, OneLogin, and Azure AD to opt for SCIM. They benefit from SCIM adoption, as it makes the management of identities in cloud-based applications more manageable than before. All they need to do is accept the protocol, and seamless integration of identities and resources/privileges/applications is facilitated. Providers can help organizations manage the user life cycle with supported SCIM applications or SCIM interfaced IDPs (Identity Provider).   

How JIT and SCIM differ

As explained earlier, SCIM is the next level of automation. SCIM provisioning automates provisioning, de-provisioning, and management, while JIT automates account development. Organizations need to deprovision users when they leave the organization or move to a different role. JIT does not provide that facility. While the user credentials stop working, the account is not deprovisioned. With SCIM, app access is automatically deleted.     

Though JIT is more common, and more organizations are going forward with JIT implementation, SCIM is in trend. Several cloud directory service providers realizing the tremendous potential of SCIM have accepted the protocol. SCIM, they recognize, is the future of IAM.   

Benefits of SCIM Provisioning

1. Standardization of provisioning

Every type of client environment is handled and supported by the SCIM protocol. SCIM protocol supports Windows, AWS, G Suite, Office 365, web apps, Macs, and Linux. Whether on-premise or in the cloud, SCIM is ideal for organizations desiring seamless integration of applications and identities. 

2. Centralization of identity

An enterprise can have a single source of truth, i.e., a common IDP (identity provider), and communicate with the organization’s application and vendor application over SCIM protocol and manage access.

3. Automation of onboarding and offboarding 

Admins no longer need to create and delete user accounts in different applications manually. It saves time and reduces human errors. 

4. Ease of compliance 

As there is less manual intervention, compliance standards are higher. Enterprises can control user access without depending upon SaaS providers. Employee onboarding or turnover can be a massive effort if conducted manually. Especially when employees onboard or offboard frequently, the corresponding risks of a data breach are high. Also, as an employee’s profile will change during their tenure, compliance can be a threat if access is not managed correctly. With SCIM, all scenarios described above can be transparently handled in one place.

5. More comprehensive SSO management

SCIM complements existing SSO protocols like SAML. User authentication, authorization, and application launch from a single point are taken care of with SAML. Though JIT user provisioning with SAML helps provision, it does not take care of complete user life cycle management. SCIM and SAML combination SSO with user management across domains can be easily managed.

SCIM is hard to ignore

Modern enterprises cannot deny the importance of SCIM protocol. According to the latest Request for Comments – a publication from the Internet Society (ISOC) and associated bodies, like the Internet Engineering Task Force (IETF) – “SCIM intends to reduce the cost and complexity of user management operations by providing a common user schema, an extension model, and a service protocol defined by this document.” Not just in terms of simplifying IAM and enabling users to move in and out of the cloud without causing the IT admin needless worry, SCIM compliant apps can avail the pre-existing advantages like code and tools. 
At Magic FinServ, we realize that the most significant benefit SCIM brings to clients is that it enables them to own their data and identities. It helps IT prioritize their essential functions instead of getting lost in the mire tracking identities and user access. Magic FinServ is committed to ensuring that our clients keep pace with the latest developments in technology. Visit our cloud transformation section to know more.

85% of organizations include workload placement flexibility in their top five technology priorities – and a full 99% in their top 10.” 

The pandemic has been an eye-opener. While organizations gravitated towards the cloud before the pandemic, they are more likely to opt for the cloud now as they realize the enormous benefits of data storage and processing in an environment unencumbered by legacy systems. The cloud facilitates the kind of flexibility that was unanticipated earlier. Other reasons behind the cloud’s popularity are as follows:  

• Consolidates data in one place: Organizations do not have to worry about managing data on-prem data centers anymore.

• Self-service capability: This feature of the cloud enables organizations to monitor network storage, server uptime, etc., on their own.

• Promotes agility: The monolithic model that companies were reliant on earlier was rigid. With the cloud, teams can collaborate from anywhere instead of on-prem.

• Ensures data security: By modernizing infrastructure and adopting the best practices, organizations can protect their critical data from breaches.

• Fosters innovation: One can test new ideas and see if it works. For example, the deployment team can conduct a quick POC and see if it meets the desired objectives.

• Scalable: One can scale up and down as per the need of the hour. Operational agility ranks high in the list of CIO objectives.

• High availability: Ensures anytime and anywhere access to tools, services, and data. In the event of a disaster, backup and recovery are easily enabled. Not so for on-prem data storage.

• Affordable: Cloud services use the pay-per-use model. There is no upfront capital expenditure for hardware and software. Most organizations resort to the pay-as-you-go model and thereby ward off unnecessary expenditure.      

Migration strategies 

“Ninety percent of organizations believe a dynamically adjustable cloud storage solution will have a moderate to high impact on their overall cloud success.”

While most organizations are aware that they must move their workloads to the cloud – given the marketplace’, they are not sure how to start. Every cloud migration is unique because each organization has its priorities, application design, timelines, cost, and resource estimates to consider while pursuing the cloud strategy. Hence, the need for a vendor that understands their requirements. After all, a digital native would pursue a cloud strategy completely differently from organizations that have complex structures and legacy systems to consider. Their constraints and priorities being different, the one-size-fits-all approach does not work, especially for financial services organizations. The key is to incorporate a migration strategy at a pace the organization is comfortable with instead of going full throttle. 

This article has identified the three most important cloud migration strategies and the instances where these should be used.  

1. Lift & Shift
2. Refactor 
3. Re-platform

Lift & Shift – for quick ROI

The Lift & Shift (Rehosting) strategy of cloud migration re-hosts the workload, i.e., the application “as-it-is” from the current hosting environment to a new cloud environment. The rehosting method is commonly used by organizations when they desire speedy migration with minimal disruption. 

Following are the main features of the rehosting approach: 

• Super quick turnaround: This strategy is useful when tight deadlines are to be met. For example, when the current on-prem or hosting provider’s infrastructure is close to decommissioning/end of the contract, or when the business cannot afford prolonged downtime. Here, the popular approach is to re-host in the cloud and pursue app refactoring later to improve performance.  

• Risk mitigation: Risk mitigation is important. Organizations must ensure the budget and mitigation plan takes account of the inherent risks. It is probable that no issues surface during the migration, but after going live, run-time issues might surface. The risk mitigation in such instances could be as small as the ability to tweak or refactor as per need.

• Tools of transformation: Lift & Shift can be performed with or without the help of migration tools. Picking an application as an image and exporting it to a container or VM, running on the public cloud using migration tools like VM Import or CloudEndure is an example of Lift & Shift, frequently employed by organizations. 

While choosing lift-and-shift, remember that quick turnaround comes at the cost of restricted use of features that make the cloud efficient. All cloud features cannot be utilized by simply re-hosting an application workload in the public cloud. 

Refactor – for future-readiness

Refactoring means modifying an existing application to leverage cloud capabilities. This migration strategy is suitable to refactor to cloud-native applications that utilize public cloud features like auto-scaling, serverless computing, containerization, etc.

We have provided here a few easy cloud feature adaptation examples where the refactoring approach is desirable:

• Use “object storage services” of AWS S3, GCP, etc., to download and upload files.

• Auto-scaling workload to add (or subtract) computational resources

• Utilizing cloud-managed services like managed databases, for example, AWS Relational Database Services (RDS ) and Atlas Mongo. 

Distinguishing features of this kind of cloud migration, and what organizations should consider:

• Risk mitigation: Examine the expense – capital invested. Appraise the costs of business interruptions due to rewrite. Refactoring software is complex as the development teams who developed code could be busy with other projects.  
• Cost versus benefit: Weigh the advantages of the refactoring approach. Refactoring is best if benefits outweigh the costs and the migration is feasible for the organization considering the constraints defined earlier.
• Refactor limited code: Due to these limitations, businesses usually re-factor only a limited portion of their portfolio of applications (about 10%).

Though the benefits of this approach – like disaster recovery and full cloud-native functionality – more than makes up for the expenses, businesses nonetheless must consider other dynamics. Another advantage of this approach is its compatibility with future requirements.              

Re-platform – meeting the middle ground.

To utilize the features of cloud infrastructure, re-platform migrations transfer assets to the cloud with a small amount of modification in the deployment of code. For example, using a managed DB offering or adding automation-powered auto-scaling. Though slower than rehosting, re-platforming provides a middle ground between rehosting and refactoring, enabling workloads to benefit from basic cloud functionality.

Following are the main features of the re-platform approach:

• Leverage cloud with limited cost and effort: In case the feasibility study reveals that refactoring is possible, but the organization wants to leverage cloud benefits, re-platforming is the best approach.

• Re-platform a portion of workload: Due to constraints, companies opt to re-platform 20-30 % workload that can be easily transformed and can utilize cloud-native features.

• Team composition: In such projects, cloud architecting and DevOps teams play a major role without depending heavily on development team/code changes. 

• Leverage cloud features: Cloud features that can be leveraged are: auto-scaling, managed services of the database, caching, containers, etc. 

For an organization dealing with limitations like time, effort, and cost while desiring benefits of the cloud, re-platforming is the ideal option. For example, for an e-commerce website employing a framework that is unsuitable for serverless architecture, re-platforming is a viable option.  

Choosing the right migration approach secures long-term gains.

What we have underlined here are some of the most popular cloud migration strategies adopted by businesses today. There are others (migration approaches) like repurchasing, retaining, and retiring. These function as their names imply. In the retain (or the hybrid model), organizations keep certain components of the IT infrastructure “as-it-is” for security or compliance purposes. When certain applications become redundant, they are retired or turned off in the cloud. Further, organizations can also choose to drop their proprietary applications and purchase a cloud platform or service. 

At Magic FinServ, we have a diverse team to deliver strategic cloud solutions. We begin with a thorough assessment of what is best for your business. 

Today, organizations have realized that they cannot work in silos anymore. That way of doing business became archaic long ago. As enterprises demand more significant levels of flexibility and preparedness, the cloud becomes irreplaceable. It allows teams to work in a  collaborative and agile environment while ensuring automatic backup and enhanced security. As experts in the field, Magic FinServ suggests that organizations approach the migration process with an application-centric perspective instead of an infrastructure-centric perspective to create an effective migration strategy. The migration plan must be resilient and support future key business goals. It must adhere to the agile methodology and allow continuous feedback and improvement. Magic Finserv’s cloud team assists clients in shaping their cloud migration journey without losing sight of end goals and ensuring business continuity. 

If your organization is considering a complete/partial shift to the cloud, feel free to write to mail@magicfinserv.com to arrange a conversation with our Cloud Experts. 

A couple of years ago, Uber – the ride-sharing app, revealed that it had exposed the personal data of millions of users. The data breach happened when an Uber developer left the AWS access key in the GitHub repository. (Scenarios such as these are common since in a rush to release code, developers unknowingly fail to protect secrets.) Hackers used this key to access files from Uber’s Amazon S3 Datastore.

As organizations embrace the remote working model, security concerns have increased exponentially. This is problematic for healthcare and financial sectors dealing with confidential data. Leaders from the security domain indicate that there would be dire consequences if organizations do not shed their apathy about data security. Vikram Kunchala, US lead for Deloitte cyber cloud practice, warns that the attack surface (for hackers) has become much wider (as organizations shift to cloud and remote working) and is not limited to the “four walls of the enterprise.” He insists that organizations must consider application security a top priority and look for ways to secure code –  as the most significant attack vector is the application layer. 

Hence a new paradigm with an ongoing focus on security – shifting left. 

Shifting left: Tools of Transformation. 

Our blog, DevSecOps: When DevOps’ Agile Meets Continuous Security, focused on the shifting left approach. The shift-left approach means integrating security early in the DevOps cycle instead of considering it as an afterthought. Though quick turnaround time and release of code are important, security is vital. It cannot be omitted.  Here, in this blog, we will discuss how to transform the DevOps pipeline into the DevSecOps pipeline and the benefits that enterprises can reap by making the transition.  

At the heart of every successful transformation of the Software Development Life Cycle (SDLC) are the tools. These tools run at different stages of the SDLC and add value at different stages. While SAST, Secret detection, and Dependency scanning run through the create and build stage, DAST is applicable in the build stage. 

To provide an example, we can use a pipeline with Jenkins as CI/CD tool. For security assessment, the possible open-source tools that we can consider include Clair, OpenVAS, etc.

Static Application Security Testing (SAST) 

SAST works on static code and does not require finished or running software (unlike DAST). SAST identifies vulnerability and possible threats by analyzing the source code. It enforces coding best practices and standards for security without executing the underlying code.

It is easy to integrate SAST tools into the developer’s integrated development environment (IDE), such as Eclipse. Some of the rules configured on the developer’s IDE – SQL injection, cross-site scripting (XSS), remote code injection, open redirect, OWASP Top 10, can help identify vulnerabilities and other issues in the SDLC. In addition to IDE-based plugins, you can activate the SAST tool at the time of code commit. This will allow collaboration as users review, comment, and iterate on the code changes.

We consider SonarQube, NodeJsScan, GitGuardian as the best SAST tools for financial technology. Among the three, SonarQube has an undisputed advantage. It is considered the best-automated code review tool in the market today. It has thousands of automated Static Code Analysis rules that help save time and enable efficiency. SonarQube also supports multiple languages, including a combination of modern and legacy languages. SonarQube analyzes the repository branches and informs the tester directly in “Pull Requests.”

Other popular tools for SAST are – Talisman and Findbug. These mitigate security threats by ensuring that potential secrets/sensitive information does not leave the developer’s workstation.

SAST tools must be trained or aligned (in the configuration) as per the use case. For optimized effectiveness, one must figure a few iterations beforehand to remove false positives, irrelevant checks, etc., and move forward with zero-high severity issues.

Secret Detection

GitGuardian has revealed that it detected more than two million “secrets” in public GitHub repositories last year. 85% of the secrets were in the developers’ repositories which fell outside corporate control. Jeremy Thomas, the GitGuardian CEO, worries about the implications of the findings. He says, “what’s surprising is that a worrying number of these secrets leaked on developers’ personal public repositories are corporate secrets, not personal secrets.” 

Undoubtedly, secrets or codes that developers leave in their remote repositories (sometimes) are a significant security concern. API keys, database credentials, security certificates, passwords, etc., are sensitive information, and unintended access can cause untold damage. 

Secret Detection tools are ideal for resolving this issue. Secret detection tools prevent unintentional security lapses as it scans source code, logs, and other files to detect secrets left behind by the developer. One of the best examples of a secret detection tool is GitGuardian. GitGuardian’s code searches for proof of secrets in developers’ repositories and stops “hackers from using GitHub as the “backdoor to business.” From keys to database connection strings, SSL certificates, usernames, and passwords, GitGuardian protects 300 different types of secrets. 

Organizations can also prevent leaks with vaults and pre-commit hooks.         

Vaults: Vaults are an alternative to using secrets directly in source code. Vaults make it impossible for developers to push secrets to the repository. Azure vaults, for example, can store keys and secrets whenever needed. Alternatively, secrets can be used in Kubernetes.                                                                                                                                     

Pre-Commit hooks: Secret detection tools can also be activated with pre-commit tools, such as the tools embedded in the developer’s IDE to identify sensitive information like keys, passwords, tokens, SSH keys. 

Dependency Scanning 

When a popular NPM module, npm left-pad (a code shortcut), was deleted by an irate developer, many software projects for Netflix, Spotify, and other titans were affected. The developer wanted to take revenge as he was not allowed to name one of his codes “Kik,” as it was the name of a social network. The absence of a few lines of code could have created a major catastrophe if action was not taken on time. NPM decided to un-publish the code and give it to a new owner. Though it violated the principles of “intellectual property,” it was necessary to end the crisis.    

It is beyond doubt that if libraries/components are not up to date, vulnerabilities creep in. Failure to check dependencies can have a domino effect. If one card falls, others fall as well. Hence the need for clarity and focus because “components, such as libraries, frameworks, and other software modules, run with the same privileges as the application. If a vulnerable component is exploited, such an attack can facilitate serious data loss or server takeover. Applications and APIs using components with known vulnerabilities may undermine application defenses and enable various attacks and impacts.” 

Dependency Scanning identifies security vulnerabilities in dependencies. It is vital for instilling security in SDLC. For example, if your application is using an external (open source) library (known to be vulnerable), tools like Snyk and White Source Bolt can detect and fix all vulnerabilities.    

Dynamic Application Security Testing (DAST) 

DAST helps to find vulnerabilities in running applications. Assists in the identification of common security bugs such as SQL injection, cross-­site scripting, OWASP top 10., etc. It can detect runtime problems that static analysis ignores, such as authentication and server configuration issues and vulnerabilities – apparent when a known user logs in. 

OWASP ZAP is a full-featured, free, and open-source DAST tool that includes automated vulnerability scanning and tools to aid expert manual web app pen-testing. ZAP can exploit and recognize a large number of vulnerabilities.

Interactive Application Security Testing (IAST) – Works best in the QA environment.  

Known as “grey box” testing, Interactive Application Protection Monitoring (IAST) examines the entire application. It has an advantage over DAST and SAST. It can be scaled. Normally an agent inside the test runtime environment implements IAST (for example, instrumenting the Java Virtual Machine [JVM] or the.NET CLR) – watches for operations or attacks and detects flaws. 

Acunetix is a good example of an IAST tool.

Runtime Application Self Protection (RASP)

Runtime Application Self Protection (RASP) is server-side protection that activates on the launch of an application. Tracking real-time attacks, RASP shields the application from malicious requests or actions as it monitors application behavior.  RASP detects and mitigates attacks automatically,  providing runtime protection. Issues are instantly reported after mitigation for root cause analysis and fixes.

An example of the RAST tool is Sqreen; Sqreen defends against all OWASP top 10 security bugs, including SQL injection, XSS, and SSRF. Sqreen is effective with its ability to use request execution logic to block attacks with fewer false positives. It can adapt to your application’s unique stack, requiring no redeployment or configuration inside your software, making setup easy and straightforward.

Infrastructure Scan  

These scans are performed on production and other similar environments. These scans look for all the possible vulnerabilities: software running, open ports, SSLs, etc., to keep abreast with the latest vulnerabilities discovered and reported worldwide. Periodic scans are essential. Scanning tools utilize vulnerability databases like Common Vulnerability and Exposure (CVE) and U.S. National Vulnerability Database (NVD) to ensure that they are up to date. Open VAS, Nessus, etc., are some excellent infrastructure scan tools. 

With containers gaining popularity, container-specific tools like Clair DB are gaining prominence. Clair is a powerful open-source tool that helps scan containers and docker images for potential security threats.  

Cultural aspect 

Organizations must change culturally and ensure that developers and security analysts are on the same page. Certain tools empower the developer and ensure that they play a critical role in instilling security. SAST in the DevSecOps pipeline, for example, empowers developers with security knowledge. It helps them decipher the bugs that they might have missed. 

Kunchala acknowledges that organizations that have defense built into their culture face less friction handling application security compared to others. So a cultural change is as important as technology. 

Conclusion: Security cannot be ignored; it cannot be an afterthought

No one tool is perfect. Nor can one tool solve all vulnerabilities. Neither can one apply one tool to the different stages of the SDLC. Tools must be chosen according to the stage of product development. For example, if a product is at the “functionality-ready” stage, it is advisable to focus on tools like IAST and RASP. The cost of fixing issues at this stage will be high though. 

Hence the need to weave security at all stages of the SDLC. Care must also be taken to ensure that the tools complement each other. That there is no noise in communication and the management and security/development are in tandem when it comes to critical decisions.

This brings us to another key aspect if organizations are keen on incorporating robust security practices – resources. Resource availability and the value addition they bring during the different stages of the SDLC counter the investment costs.  
The DevOps team at MagicFinserv works closely with the development and business teams to understand the risks and the priorities. We are committed to further the goal of continuous security while ensuring stability, agility, efficiency, and cost-saving.

To explore DevSecOps for your organization, please write to us at mail@magicfinserv.com.

The business landscape today is extremely unpredictable. The number of applications that are hosted on disparate cloud environments or on-prem has proliferated exponentially, and hence there is a growing need for swifter detection of discrepancies (compliance and security-related) in the IT infrastructure. Continuous security during the development and deployment of software is critical as there is no forewarning when and where a breach could happen. As organizations evolve, there is always a need for greater adherence to security and compliance measures.

Earlier, software updates were fewer. Security, then, was not a pressing concern and it was standard to conduct security checks late in the software development lifecycle. However, the times have changed. Frequent software updates imply that codes are changed frequently as well. In turn, this poses unimaginable risks (if care is not taken) and as there are changes in attack surfaces and risk profiles. So, can organizations afford to be slack about security? 

The answer is no. Security is not optional anymore, it is a fundamental requirement and must be ingrained at the granular level and hence the concept of continuous security. To arrest any flaw or breach or inconsistency in design (before it too late). Organizations must check different aspects of security periodically. Whether the check happens after a predefined time or in real-time depends upon the need of the business. Security checks can be manual or automated; it can be a review of configuration parameters on one hand and constant activity monitoring on the other.  

Defining Continuous Security 

Constant activity monitoring became de facto with the rise of parameter security. And when that happened, operations started using systems like IDS, IPS, WAF, and real-time threat detection systems. But this kind of security approach tended to take account of security monitoring involving operations or infrastructure teams. The continuous security paradigm made it possible for organizations to ensure greater levels of security. The continuous security model relies on organizational processes, approvals, and periodic manual checks to monitor the different kinds of hardware and software involved in operations.

Why DevSecOps 

“In 2018, Panera Bread confirmed to Fox News that it had resolved a data breach. However, by then it was too late as the personal information including name, email, last four digits of customer credit card number had been leaked through the website. Interestingly, Panera Bread was first alerted to the issue by security researcher Dylan Houlihan. According to KrebsOnSecurity 37 million accounts were likely to be impacted.” 

As organizations realized the importance of continuous security, the need for making it an extension of the DevOps process arose. Organizations desiring streamlined operations adopt DevOps as a means to shorten the systems development life cycle and ensure continuous delivery with high software quality.  

As DevOps, Cloud, and Virtualization gained prominence, agility and flexibility became the new axioms of development. But existing security and compliance processes that involved multiple levels of stakeholder engagement, and associated manual checks and approvals were time-consuming and tedious. A barrier to the development of a truly nimble enterprise.

We also know that as the number of people involved (stakeholders) increases, it takes greater effort to keep the business streamlined and agile. Despite that, stakeholders are integral to the DevOps process as they are responsible for the speed of delivery and quality of the application. Another barrier arises as a result of the bias and error inherent in manual security and compliance checks.    

Businesses must give due consideration to security best practices while ensuring the speed of delivery, flexibility, and agility as continuous changes in software during  DevDops are risky. But when security is integrated into DevOps’s continuous delivery loop, the security risks are minimized significantly. And so the natural extension of the concept of DevOps to DevSecOps. In the scheme of things, DevSecOps is where agile and continuous security meet.  

Ingraining Continuous Security in DevOps

While earlier, security was incorporated at the end of the software development lifecycle through manual/automated reviews, DevSecOps ensures that changes are incorporated at every stage. In doing so, loopholes that exist in code are revealed early. A quick reconciliation or remediation ensures better lead times and delivery outcomes.

Traditionally, instead of running security and compliance checks in parallel, security was taken care of after the application life cycle was complete. Though in recent years, developers have taken to writing safe code and following security best practices for developing applications, even today enterprises have not assimilated security in the continuous delivery process., Security assessments, PEN testing, vulnerability assessment, etc., are not covered in the DevOps cycle. As a result, the objective of “software, safer, sooner” is not achieved.     

SecDevOPs’ biggest asset is its inclusivity. It addresses security at every layer. All stakeholders are involved as well at the very beginning of the application’s lifecycle. It is a continuous process. Here, the security teams use all the tools and automation done by DevOps in conjunction with security teams.

Advantage of DevSecOps

DevSecOps Security is Built-In

DevSecOps runs on a very simple premise. Ensuring application and infrastructure security from the very beginning. Automating security tools and processes is integral to this approach as it is dependent on the speed of delivery that takes a hit whenever repeated or recurring low-complexity tasks are allocated to manual labor. Security scans and audits are onerous and time-consuming if done manually. 

However effective the DevOps team may be with automation and tools, its success depends upon integrating the work of security and audit teams within the development lifecycle. The sooner done, the better. As data breaches become common and the costs of remediating them are exorbitant, it becomes crucial to employ security experts at every stage of the software development life cycle instead of relegating them to gatekeeping activity.        

“DevSecOps is security within the app life cycle. Security is addressed at every stage”

DevSecOps Solution to Compliance Concern

With more access comes a greater threat. As applications moved to the cloud and DevOps became the much-sought means for streamlining operations, there were concerns about breaches. As third-party vendors were accessible to many of the internal processes, it became necessary to delineate access and ensure greater compliance. With the DevSecOps approach, all the fears were repudiated. It was evident that DevOps had no adverse effect. Instead, it ensured compliance. It is now more important to focus on how DevOps is implemented. How to balance automation of compliance adherence with minimal disruption to the business.  

Seven Salient Features of the DevSecOps Approach 

❖     Promote the philosophy “Security is everyone’s concern”

Develop security capability within teams and work with domain experts. Security teams work with DevOps to automate the security process. DevSecOps operatives work with security teams and integrate security as part of the delivery pipeline. Development teams and testing teams are trained on security so that they can focus on security to be as important as functionality.

❖     Address security bugs early.

Find and fix security bugs and vulnerabilities as early as possible in the Software Development Lifecycle (SDLC). This is done by automated scans and automated security testing, integrated with CI/CD pipeline. This requires a shift left approach in the delivery pipeline – the development and testing teams fix the issues as soon as it arises and then moves onto the next stage of the cycle. Right after addressing the concern. 

❖     Integrate all security software centrally

Integrating all security software (which includes code analysis tools, automated tests, vulnerability scans, etc.,) at a central location – accessible to all stakeholders. Since it is not viable to address multiple concerns at the same time. As it is a bit too much work in the early stages of the project, teams must prioritize. Priority must be accorded based on potential threats and known exploits. Doing this would help utilize the test results more effectively. 

❖     Continuously measure and shrink the attack surface.

Going beyond perimeter security by implementing continuous vulnerability scans and automated security tests minimizes the attack surface. Issues and threats are addressed before they can be exploited.

❖      Automation to reduce effort and increase accuracy.  

Agility and accuracy in security risk mitigation are dependent on the ability of the DevOps team to automate. This reduces the manual effort and associated errors that arise due to ingrained bias and other factors. The choice of tools used by the team is important as it should support automation. For obvious reasons, organizations prefer open-source tools as they are flexible and can be modified.  

  ❖    Automation in change management 

The push for automation has resulted in teams (involved application development and deployment) defining a set of rules for decision making. Increased availability of automation tools and machine learning gave greater impetus to change management automation. Only exceptional cases require manual intervention, thus decreasing the turnaround time.

❖     Ensures 24 x 7 compliance and reporting 

Compliance no longer remains a manual and cumbersome work to be done at certain times in the software life cycle. DevSecOps enables using automation to monitor compliance continuously and alert when the possible risk of breach happens. Compliance reporting often considered as an overhead, and time-intensive activity is now readily available. Thus, a system can be in a constant state of compliance.

DevSecOps – ensuring agility and security

The ever-increasing complexity in multi-cloud and on-premise and the highly distributed nature of DevOps operations (teams are spread across different zones) are driving organizations to ensure that continuous security is one of the pillars of the operational processes. In the evolving business landscape in the COVID-19 era, DevSecOps drives a culture of change. One, where security is no longer a standalone function and security teams work in tandem with development and testing teams to ensure that continuous deployment meets continuous security.     

As a leading technology company for financial services, Magic FinServ enables clients to scale to the next level of growth at optimal costs while ensuring adherence to security and compliance standards. Partnering with clients, in their application development and deployment journey, we establish secure practices from Day 0 to implement SecDevOps practices. From continuous feedback loops to regular code audits, all are performed in a standardized manner to ensure consistency. 

To explore DevSecOps for your organization, please write to us at mail@magicfinserv.com.

Burdened by silos and big and bulky infrastructure, the financial services sector seeks a change that brings agility and competitiveness. Even smaller financial firms are dictated by a need to cut costs and stand out. 

“The widespread, sudden disruptions caused by the COVID situation have highlighted the value of having as agile and adaptable a cloud infrastructure as you can — especially as we see companies around the world expedite investments in the cloud to enable faster change in moments of uncertainty and disruption like we faced in 2020.” Daniel Newman 

Embracing cloud in 2021

The pandemic has been the meanest disrupter of the decade. Many banks went into crisis mode and were forced to rethink their options and scale up to ensure greater levels of digital transformation. How quickly these were able to scale up to meet the customer’s demands became a critical asset in the new normal. 

With technology stacks evolving at lightning speeds and application architecture replaced with private, public, hybrid, or multi-cloud, the financial services sector can no longer resist the lure of the cloud.  Cloud has become synonymous with efficiency, customer-centricity, and scalability.  

Moreover, most financial institutions have realized that the ROI for investment in the cloud is phenomenal. The returns that a financial firm may get in 5 years are enormous. As a result, financial firms’ investment in the cloud market is expected to grow at a CAGR of 24.4% to $29.47 billion by 2021. The critical levers for this phenomenal growth would be business agility, market focus, and customer management.               

Unfortunately, while cloud adoption seems inevitable, many financial industry businesses are still grappling with the idea and wondering how to go about it efficiently. The smaller firms are relative newcomers in terms of cloud adoption. The industry had been so heavily regulated that privacy and fear of data leaks almost prevented the financial institutions from moving to the cloud. The most significant need is trust and reliability as migration to the cloud involves transferring highly secure and protected data. Therefore, the firms need a partner with expertise in the financial services industry to securely envision a transition to the cloud in the most seamless manner possible.  

Identifying your organization’s cloud maturity level     

The first step towards an efficient move to the cloud is identifying your organization’s cloud maturity level. Maturity and adoption assessment is essential as there are benefits and risks involved with short-and long-term impacts. Rushing headlong into uncharted waters will not serve the purpose. Establishing the cloud maturity stage accelerates the firm’s cloud journey by dramatically reducing the migration process’s risks and sets the right expectations to align organizational goals accordingly.

Progressing from none to optimized, presented below are the levels in terms of maturity. Magic FinServ uses these stages to assess a firm’s existing cloud state and then outlines a comprehensive roadmap that is entirely in sync with the firm’s overall business strategy. 

STAGE 1: PROVISIONAL

Provisional is the beginner stage. At this stage, the organization relies mainly on big and bulky infrastructure hosted internally. There is little or no flexibility and agility. At the most, the organization or enterprise has two or three data centers spread across a country or spanning a few continents. The LOBs are hard hit as there is no flexibility and interoperability. Siloed culture is also a significant deterrent in the decision-making process. 

The process for application development ranges from waterfall to basic forms of agile. The monolithic architecture/three-tier architecture hinders flexibility in the applications themselves. The hardware platforms are typically a mix of proprietary & open UNIX variants (HP UX, Solaris, Linux, etc.) to Windows.

There is a great deal of chaos in the provisional stage. Here the critical requirement is assessing and analyzing the business environment to develop an outline first. The need is to ensure that the organization gains confidence and realizes what it needs for fruitful cloud implementation. There should be a strong sense of ownership and direction to lead the organization into the cloud, away from the siloed culture. The enterprise should also develop insights on how they will further their cloud journey.

STAGE 2: VIRTUALIZATION 

In this next stage of the cloud maturity model, server virtualization is heavily deployed across the board. Though here again, the infrastructure is hosted internally, there is increasing reliance on the public cloud. 

The primary challenges that organizations face in this stage of cloud readiness are related to proprietary virtualization costs. LOBs may consider accelerating movement to Linux-based virtualization running on commodity servers to stay cost-competitive. However, despite the best efforts, system administration skills and costs associated with migration remain a significant bottleneck.

STAGE 3: CLOUD READY 

At this significant cloud adoption stage, applications are prepared for a cloud environment, in the public or private cloud as part of the portfolio rationalization exercise. 

The cloud migration approaches are primarily four types   

• Rehosting: It is the most straightforward approach to cloud migration and as the name implies consists of lifting and shifting applications, virtual machines from the existing environment to the public cloud. When a lift-and-shift approach is employed, businesses are assured of minimum disruption, less upfront cost, and quick turn-around-time (this is the fastest cloud migration approach). But there are several drawbacks as well – there is no learning curve for cloud applications. Performance is not enhanced as there is no change in code. It is only moved from the data center to the cloud.        
• Replatforming: Optimize lift and shift or move to another cloud from the existing cloud. Apart from what is done in the standard lift-and-shift, it involves optimization of the operating system (OS), changes in API, and middleware upgrade.   
• Refactoring/Replacing: Here, the primary need is to make the product better and hence developers re-architect legacy systems to build cloud-native systems from scratch.    

The typical concerns at this cloud adoption stage are quantitative such as the economics related to infrastructure costs, developer/admin training, and interoperability costs. Firms or organizations are also interested in knowing the ROI and when it will finally break-even.

At this stage, an analysis of the organization’s risk appetite is carried out. With the help of a clear-cut strategy, firms can stay ahead of the competition as well. 

STAGE 4: CLOUD OPTIMIZED

Enterprises in this stage of cloud adoption realize that cloud-based delivery of IT services (applications or servers or storage or application stacks for developers) will be its end objective. They have the advantage of rapidly maturing cloud-based delivery models (IaaS and SaaS) and are increasingly deploying cloud-native architecture strategies and design across critical technical domains.

In firms with this level of maturity, cloud-native ways of developing applications are de facto. As cloud-native applications need to be architected, designed, developed, packaged, delivered, and managed based on a deep understanding of cloud computing frameworks, the need is for optimization throughout the ecosystem. The applications are designed for scalability, resiliency, and incremental enhance-ability from the get-go. Depending on the application, supporting tenets include IaaS deployment & management and container orchestration alongside Cloud DevOps. 

Conclusion

Cloud adoption has brought the immense benefits of reduced Capex Spend, lowered complexity in IT management, and improved security and agility across firms. The financial services sector has also increasingly adopted the cloud. Despite the initial apprehensions in terms of security and data breaches, an overwhelming 92% of banks are either already making effective use of the cloud or planning to make further investments in 2021/22, as evident from a report by the Culture of Innovation Index, recently published by ACI Worldwide and Ovum.  

While cloud adoption is the new norm, doing it effectively starts with identifying where the firm is currently and how long the journey is to be ‘cloud-native.’ 

Magic FinServ’s view of Cloud Adoption for Financial Firms

Magic FinServ understands the importance of a practical cloud roadmap. It strategizes and enables firms to understand what it is that they need. We are committed to finding the right fitment according to the financial firm’s business.

While in recent times, the preference is for a multi-vendor hybrid cloud strategy. With our cloud assessment and remediation services tailored specifically for financial institutions, we thoroughly understand the specialized needs of the capital market. Our team comprises capital-market domain expert cloud architects who assess, build, design, migrate cloud solutions tailored just for capital market players, and are in total compliance with the industry’s complex regulatory requirements.

At Magic FinServ, the journey begins with assessing maturity in terms of technical and non-technical capabilities. Magic has developed a comprehensive 128 point assessment that measures your organization’s critical aspects of cloud and organizational readiness. We understand the operational, security, and confidentiality demands of the buy-side industry and advise your firm on the best course of action. 

Magic FinServ helps demystify the cloud migration journey for firms and then continually improve the environment stability with the advanced Cloud DevOps offering, including SecDevOps. Our highly lauded 24/7 Production support is unique as it is based on adhering to SLAs at each stage of the journey. The SLAs are met across the solution and not just one area, and proper reporting is done to prevent any compliance-related issues. To explore how your organization can realize optimum cloud benefits across various stages of the cloud adoption journey, reach out to us at mail@magicfinserv.com or Contact Us.

Firstly, a sincere wish for safety and wellbeing of all, my deepest sympathies for those who fought valiantly and prayers for those who continue to fight. As our communities fight for lives and livelihood, we as  business leaders shoulder the responsibility to help our organizations and the world arise strong and resurgent. 

Magic FinServ is one such company where we could, overnight, move our operations into a remote working model, with all the security and confidentiality norms intact. This was only possible because we are a cloud-first company, effectively running our business on the cloud while supporting numerous clients across geographies. Amidst efforts to minimize disruptions to our daily business operations, we were also highly cognizant of the increased security vulnerabilities arising out of this paradigm shift. We made some hard and expensive choices to keep our global teams functioning well during severe lockdowns. We improvised and made possible actions that we would have never dreamt of and we will continue to make difficult choices in the months to come. There is no “Going Back to Work” as we know it today as several aspects that we took for granted will no longer be required while repeated lockdowns and disruptions will  become the norm. 

The Rising popularity of Cloud

As per a survey conducted by Forbes, in early 2020, as many as 50% of Financial Services leaders had placed Cloud BI as their top priority this year. And in a post-COVID world, the cloud is definitely going to be the center of all technology. Cloud, thus moved quickly from being an IT cost-center of a hedge-fund to an essential component for running a nimble, agile, and highly scalable organization that operates on a fully variable cost model, and most importantly securely accessible to all stakeholders. Smart managers will seize this opportunity to design a whole new organization from a brand new set of principles as virtual is now our new reality.   

Cloud for Hedge Funds

As the situation around COVID19 having unprecedented business implications arose, a key question also emerged that begs an answer:  Why are only some companies thriving and handling this disruption well? From a technical viewpoint, the companies that are handling it well are either the SaaS companies or those that have set themselves up predominantly operating on the cloud. 

For hedge funds, asset managers, and other capital market entities, the cloud has capabilities to support front, middle and back-office functions. This includes everything ranging from business applications and client relationship management systems to data management solutions and accounting systems. Cloud emerged as a path of choice but its considerations for capital markets are different than ones applicable for other businesses, owing to industry regulations, complex reporting, the sensitivity of data, and compliance requisites of the industry. 

As a provider of Digital Technology (AI / ML / Blockchain / Cloud) Services, Magic FinServ has a unique proposition that makes deploying and maintaining a capital markets cloud initiative time-bound, cost-effective, and highly secure. Our deep understanding of the vertical enables us to be a strategic partner as our customers design their organization to take on the new challenges and opportunities. 

Getting Started With Cloud: Time for a Health Check

A highly recommended first step towards the cloud, for any hedge fund or asset manager,  would be a comprehensive assessment of your organization for cloud readiness and maturity. The assessment of your IT infrastructure and operations for business continuity, reliability, scalability, accessibility, while maintaining the same levels of security and confidentiality as physically secure operations centers, is rather imperative so you can plan and weather the disruptions to emerge stronger and leaner. Well begun is half done stands true for cloud as well. 

At Magic FinServ, we developed a 128 point assessment offering that measures your organization on these critical aspects. We understand the operational, security, and confidentiality demands of the buy-side industry and we assess your ability to meet these exacting demands. Increasingly, your customers, investors, and other counterparties will also assess you on these parameters, so a comprehensive assessment study will help you respond to these queries with confidence.

The assessment need not be a time consuming, expensive affair since we have customized and optimized our assessment for the buy side-industry. A typical small to midsize operation would need about 2-3 months. It is a relatively small time investment that will identify the gaps and make recommendations to bridge these gaps so that your onward cloud journey is smooth, in-line with your business objectives and saves you from expensive mistakes later. 

Migration and Deployment to Cloud

According to ValueWalk, almost 90% of hedge funds will move to the cloud, in the next 5 years. Migration / Deployment to cloud was often seen as an IT cost initiative earlier, however, as firms move from a CapEx to an OpEx preference, it is now increasingly becoming a key element of a whole new way of operations. 

Most organizations in the financial services industry take a phased approach of moving to the cloud, with multi-year plans. They start with setting the framework and testing the waters with an initial few applications, usually business applications like Email, File Sharing, OMS, Risk, and CRM, moving them to a hosted model. The benefits of adopting this hosted model include gaining a highly available infrastructure of the cloud providers. This is typically followed by migrating data to the cloud and finally moving the bulk of the workload in a lift and shift mode. 

Somewhere in this journey, security is addressed. What is often missing in this  journey is the aspect of transformation, especially when there is the burden of legacy, monolithic applications that are in dire need of modernization and transformation. The proper planned and orchestrated migration to cloud is an ideal opportunity to address this long pending initiative.

Magic FinServ, with its focus on capital markets vertical, has developed an Integrated, Incremental, and Scalable method of incorporating cloud into the customer’s ecosystem. An integrated approach to Applications, Infrastructure, and Security helps us come up with a robust and holistic plan. The approach uses as many native services of the cloud provider as possible making it easily adaptable to the cloud environment, bringing in cost efficiencies. A segmented and incremental approach to Applications (Microservices), Infrastructure and Security (DevSecOps, Micro-Segmentation) results in moving incremental and prioritized workloads to the cloud, helping utilize multiple cloud environments thereby leveraging the best of all the providers and something that is integrated well into the hedge fund’s specific environment. Implementing the Infrastructure-as-code helps in making the cloud environment extremely manageable, scalable, simplified, and secured. 

This systemized incremental approach has helped entities to achieve rapid time to market and highly optimized cost of deployment while bringing incremental benefits very early in the deployment life cycle. Our objective remains to make this transition as much self-funded and sustainable as possible thereby delivering a high ROI. 

Managing the Cloud Environment Effectively

The Cloud is democratizing the consumption of IT Services and driving innovation. However if not governed effectively, this sudden freedom and access could spiral your  cloud’s running and managing costs, while making it susceptible to security risk. The democratization has been made possible by public cloud providers making available out of the box capabilities, or native cloud capabilities. However, these additional capabilities come at the cost of additional spend as well as some loss of flexibility. Optimal management of such capabilities is necessary to maintain a balance between time to market on one hand and cost, flexibility, and security on the other.

Magic FinServ has developed an integrated operations and IT monitoring support capability to provide customers with a SaaS type model, enabling the smooth and uninterrupted running of business operations incorporated in the architecture itself. Automated release and deployment, coupled with automated infrastructure testing help make change and configuration management easy and fast. Since uptime is crucial to operational efficiency and profitability, the high-touch support model across L1, L2, L3, ensures quick resolution of any issues and congruence across functions. 

Handling Enterprise Data

A key element of the buy-side industry is the management of enterprise data. This not only impacts upfront costs but also could potentially impact business outcomes. Magic FinServ, as a member of the EDMCouncil, ensures that an enterprise data architect is a part of our cloud center of excellence, as a best practice. We have been supporting enterprise data initiatives for several buy-side organizations over the years and hence are abreast of the inconsistencies that may be caused by customizing underlying data models to suit specific organization needs. Our industry-driven high touch support services help in managing these inconsistencies, especially as we help move data to the cloud or the constant upstream and downstream in hybrid cloud systems. 

Conclusion

As Asset Managers and Hedge Funds make this move to the cloud in a new paradigm, they should ideally make the move with trusted and industry-oriented managed service providers, since this is a tectonic shift in their operating model. Ultimately the move to the cloud is not just a technology choice, it’s a business decision.