The financial services industry is evolving at a rapid pace, with shifting consumer expectations, new technologies, and developing regulatory requirements. Financial services firms need the right technology to help them stay agile and prepare for the future. 

The cloud is a key point of leverage for firms looking to improve performance across a broad range of activities. Moving to the public cloud can advance operational resiliency, improve staff productivity, increase regulatory compliance and enhance business model innovation. 

However, there are a number of financial services companies that are still hesitant in their cloud journeys. The barriers to adoption vary, from the complexity of legacy systems, to trust and skills gaps, regulatory uncertainty, and fragmentation of compliance requirements. Although many companies have embraced the benefits of cloud technology, more robust cloud adoption—especially around core back-office functions—will require additional facilitation, including through regulatory harmonization and streamlining.

A new comprehensive study on cloud adoption in financial services

To better understand the challenges and opportunities of cloud adoption in financial services Google Cloud, together with the Harris Poll, surveyed more than 1,300 leaders from the financial services industry across the United States, Canada, France, Germany, United Kingdom, Hong Kong, Japan, Singapore and Australia. 

There were five noteworthy takeaways from the study:  

1. A vast majority of financial services companies are already using some form of public cloud. A large number of surveyed financial services companies (83%) report they are deploying cloud technology as part of their primary computing infrastructures. Of those using cloud technology, the most popular architecture of choice is hybrid cloud (38%), followed by single cloud (28%), and multicloud (17%). Notably, of respondents without a multicloud deployment, 88% reported they are considering adopting a multicloud strategy in the next 12 months.

2. Financial services institutions in North America are leading in cloud adoption. Of the financial services companies who are implementing a cloud strategy, the highest levels of cloud workload adoption were reported in North America, with institutions in the U.S. (54%) and Canada (52%) leading the way. The lowest level of cloud adoption was reported in Japan (42%).

3. As financial services companies continue to use the cloud, more core functionalities can and will be migrated. While many financial services companies have migrated substantial workloads to the cloud, the industry is far from full adoption when it comes to core, back-office workloads. Of financial services companies currently using a majority cloud strategy in the United States, for example, only half (54%) of their workloads are fully deployed in the cloud. Data and IT security (74%), regulatory reporting (57%), and fraud detection and prevention (57%) rank among the highest workload adoption. Core underwriting activity (40%) and data reconciliation (48%) ranked lowest. Across Europe, cloud usage for core activities like underwriting also scored low with the UK listing only 30% adoption.

4. Among respondents, there is a very strong positive perception of the potential for cloud technology to assist in business operations and regulatory compliance. Nearly all respondents (>88%) agreed that cloud adoption can:

1. help adapt to changing customer behaviors and expectations,  
2. enhance operational resilience, 
3. support the creation of innovative new products and services, 
4. enhance financial services institutions’ data security capabilities, and 
5. better connect siloed legacy software infrastructure within financial services institutions. 

5. Certain regulator-induced challenges, including the complexity of sectorial compliance frameworks and fragmentation, create hurdles to cloud adoption for financial services companies. While 88% of respondents had a positive view of current regulatory efforts to provide guidance and clarity for cloud implementation, the results showed that more needs to be done to facilitate adoption. Most respondents (84%) agree that regulatory reviews and approvals take too long because of regulatory fragmentation across regulatory bodies. And 78% say that regulatory uncertainty over the use of public cloud prevents their organizations from adopting cloud technologies that would otherwise provide benefit to them. Additionally, a third of all on-premises respondents (38%) say that the large investment of resources for the regulatory approval process is a reason why they’re not using cloud services.

“While many banks have already deployed hybrid cloud environments, others are still in various stages of planning and deploying,” said Jerry Silva, research vice president for IDC Financial Insights. “Clearly, hybrid infrastructure is a reality, and financial institutions must focus not only on leveraging the modern infrastructure model to gain efficiencies, resilience and agility, but also on taking the necessary steps to manage such environments, including the security and compliance of cloud services.”

Future recommendations for financial services regulators

Financial services firms should continue to maximize the potential of technology by migrating more core workloads to the cloud, and actively considering multicloud and hybrid-cloud strategies. Such strategies enhance resiliency of existing IT infrastructure and reduce concerns over vendor lock-in. 

The research also points to steps that regulators could take to provide additional clarity and guidance, such as aligning regulatory reviews across agencies to avoid fragmentation; developing regulatory “safe harbors” for cloud adopters based on adherence to accepted standards and best practices; training regulatory staff on emerging tech; and advancing data reporting requirements via cloud and related technologies.

In the past few years, many regulators across the globe have taken a robust approach to rationalizing rules and guidance to cloud adoption in the financial sector, which has helped significantly stimulate adoption. But further assurances and harmonization of best practices around supervision is needed to advance risk-based and secure digital innovation.  

At Google Cloud, we’re committed to working with financial services customers and regulators to provide them with controls and assurances on risk management, data locality, transparency, and compliance. We are constantly engaging with regulators to share information, respond to their considerations and concerns, and address questions in the interest of transparency and building trust. 

To learn more about these findings and more, download our infographic and our full report. 

^{Research methodology}

^{The survey was conducted online by the Harris Poll on behalf of Google Cloud, from December 7, 2020, to January 4, 2021, among 1,363 senior executives in France (n=113), Germany (n=178), the UK (n=192), Hong Kong (n=99), Indonesia (n=100), Japan (n=142), Singapore (n=71), Australia (n=134), Canada (134), and the United States (n=200) who are employed full-time, part-time, or self-employed whose main functional role is in risk/compliance or IT at a company in the banking, finance, or financial services industry with a title of director level or higher. The data in each country were weighted by the number of employees to bring them into line with actual company size proportions in the population. A global post-weight was applied to ensure equal weight of each country in the global total.}

The ability to gain real-time insights from IoT data can redefine competitiveness for businesses. Intelligence allows connected devices and assets to interact efficiently with applications and with human beings in an intuitive and non-disruptive way. After your IoT project is up and running, many devices will be producing lots of data. You need an efficient, scalable, affordable way to both manage those devices and handle all that information. 

IoT Core is a fully managed service for managing IoT devices. It supports registration, authentication, and authorization inside the Google Cloud resource hierarchy as well as device metadata stored in the cloud, and the ability to send device configuration from other GCP or third-party services to devices. 

Main components

The main components of Cloud IoT Core are the device manager and the protocol bridges:

• The device manager  registers devices with the service, so you can then monitor and configure them. It provides:
  • Device identity management 
  • Support for configuring, updating, and controlling individual devices
  • Role-level access control
  • Console and APIs for device deployment and monitoring
• Two protocol bridges (MQTT and HTTP) can be used by devices to connect to Google Cloud Platform for:
  • Bi-directional messaging
  • Automatic load balancing
  • Global data access with Pub/Sub

How does Cloud IoT Core work?

Device telemetry data is forwarded to a Cloud Pub/Sub topic, which can then be used to trigger Cloud Functions as well as other third-party apps to consume the data. You can also perform streaming analysis with Dataflow or custom analysis with your own subscribers.

Cloud IoT Core supports direct device connections as well as gateway-based architectures. In both cases the real time state of the device and the operational data is ingested into Cloud IoT Core and the key and certificates at the edge are also managed by Cloud IoT Core. From Pub/Sub the raw input is fed into Dataflow for transformation, and the cleaned output is populated in Cloud Bigtable for real-time monitoring or BigQuery for warehousing and machine learning. From BigQuery the data can be used for visualization in Looker or Data Studio and it can be used in Vertex AI for creating machine learning models. The models created can be deployed at the edge using Edge Manager (in experimental phase). Device configuration updates or device commands can be triggered by Cloud Functions or Dataflow to Cloud IoT Core, which then updates the device.  

Design principles of Cloud IoT Core

As a managed service to securely connect, manage, and ingest data from global device fleets, Cloud IoT COre is designed to be:

• Flexible, providing easy provisioning of device identities and enabling devices to access most of Google Cloud
• IThe industry leader in IoT scalability and performance
•  Interoperable, with supports for the most common industry-standard IoT protocols

Use cases

IoT use cases range across numerous industries. Some typical examples include:

• Asset tracking, visual inspection, and quality control in retail, automotive, industrial, supply chain and logistics
• Remote monitoring and predictive maintenance in oil & gas, utilities, manufacturing, and transportation
• Connected homes and consumer technologies.
• Vision intelligence in retail, security, manufacturing, and industrial sectors
• Smart living in commercial, residential, and smart spaces 
• Smart factories with predictive maintenance and real-time plant floor analytics

 For a more in-depth look into Cloud IoT Core check out the documentation.  

https://youtube.com/watch?v=76v16P-Wqe4%3Fenablejsapi%3D1%26

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As a leading French agricultural cooperative, Groupe Dauphinoise places collaboration at the heart of its philosophy. Working with farmers in the Rhone-Alpes region, Groupe Dauphinoise takes on a diverse range of activities from agricultural production to research and development to running retail outlets.

As its operations expanded and strained its existing infrastructure, Groupe Dauphinoise saw the opportunity to upgrade its technology solutions and adopted G Suite, Chrome devices and ultimately Google Cloud Platform (GCP).

“We transitioned to G Suite to improve our staff’s collaboration. We quickly realized that as the company grew, we needed a new infrastructure. Based on our satisfaction with G Suite, we chose GCP. With Google, ‘any device, anytime, anywhere’ is not just a dream,” says Sylvain Claudel, Head of IT at Groupe Dauphinoise.

“We transitioned to G Suite to improve our staff’s collaboration. We quickly realized that as the company grew, we needed a new infrastructure. Based on our satisfaction with G Suite, we chose GCP. With Google, ‘any device, anytime, anywhere’ is not just a dream.”

—Sylvain Claudel, Head of IT, Groupe Dauphinoise

Flexible workforce, stable infrastructure

Many of Groupe Dauphinoise’s 1,500 employees spend their days out of the office. Five years ago, with the help of Google partner GoWizYou, the company transitioned to G Suite to improve the flexibility and collaboration of its staff.

As Groupe Dauphinoise began to expand and collect more data, the company reached the limits of its on-premise infrastructure. Adding new storage was not a simple matter. Acquiring, configuring and synchronising new servers costs Groupe Dauphinoise time as well as money. In addition, with all its servers stored in a single room, security was a concern. Groupe Dauphinoise needed a new infrastructure.

Google Cloud Platform was the only solution in mind after Groupe Dauphinoise’s experience with G Suite and Chromebooks. Disruption was kept to a minimum thanks to Google’s licensing agreements with Microsoft products, allowing the company to migrate without affecting its operations.

After migrating its infrastructure to Compute Engine, Groupe Dauphinoise can let Google look after the security and maintenance. Cloud IAM makes it easy for Groupe Dauphinoise to hand out permissions to sensitive resources across a number of sites with maximum security and minimum fuss. The company placed its archives in Cloud Storage, while Cloud SQL allows it to continue to make use of its MySQL databases without disrupting the day to day business. Meanwhile, BigQuery provides Groupe Dauphinoise with the raw power to analyse large datasets quickly.

“Our company is growing and we have more and more data to collect and analyze like sales data, weather patterns or production numbers. With GCP, we have more than a single on-premise data store, so our disaster recovery plan is much more flexible. Compute Engine allows us to add more storage quickly and easily, without having to spend days synchronizing data and installing new servers. We have improved security and maintained the stability of our infrastructure while keeping costs down,” says Sylvain.

Safeguarding the present, looking to the future

With Google Cloud Platform, Groupe Dauphinoise has expanded and secured its infrastructure without sinking costs into on-premise servers or DevOps staff. Its investment in Chrome devices and adoption of G Suite mean that its mobile workforce can fully reap the benefits of a cloud-based infrastructure while dramatically cutting the cost of hardware. Meanwhile, working with a 200 million line table of sales data in Google BigQuery, the cooperative found that queries ran ten times faster than with its previous database provider. Groupe Dauphinoise is experimenting with Google BigQuery to expand its BI capabilities. Products like Google BigQuery help Groupe Dauphinoise grow its business, safe in the knowledge that its infrastructure is stable and secure.

“The amount of data we collect is growing very quickly. We need to break our rules and evolve from the mindset that we had with on-premise infrastructure and our old databases. We can now look at collecting more customer fidelity data, or big data for our farmers. With our data and infrastructure in Google’s care, we can concentrate on growing our customer base instead of our IT department!” says Sylvain.

B2B marketplace IndiaMART aims to help businesses escape the restrictions of traditional supply chains. By providing access to a digital platform optimized for access from desktops and mobile devices, businesses can improve their operations and generate more revenue. IndiaMART’s suite of services includes web storefront, enquiry support, priority listings, premium number services, a lead management system, and payment facilitation.

IndiaMART also provides “behavior-based matchmaking” that identifies the supplier best equipped to meet buyer needs by product or service, category and location. IndiaMART then matches the designated suppliers with the buyers. Finally, IndiaMART operates as a “horizontal marketplace”—enabling suppliers to market to a large number of potential buyers—presenting a compelling offering for both groups.

Amarinder S. Dhaliwal, Chief Product Officer of IndiaMART, says once IndiaMART grew to a certain size, it benefited from a network effect—as more buyers used the marketplace, more suppliers came on board, prompting yet more buyers to access the service and so on. Suppliers becoming buyers and using IndiaMART to purchase products is another growth driver. “There is not just a network effect, but a community effect as well, as a supplier becomes a buyer,” says Dhaliwal. “This increases affinity, and supplier and buyer ‘lock-in’ to the marketplace increases multifold.”

Positioned to address challenges

IndiaMART’s proactive approach positioned the business well to address the challenges presented by new trends and market conditions. Traffic from mobile devices to its business-to-business marketplace has grown from about 30% to 75% over the last four years.

“Mobile traffic has grown at a compound annual growth rate of almost 100% over the same period,” says Dhaliwal. “The proliferation of smartphones and other mobile devices has brought a considerable number of new users onto the internet and these users look for value—the right price from the right supplier,” he adds. “Furthermore, they can connect at any time and from any location they can access a network.”

The mobility revolution also challenged IndiaMART to provide a user interface and experience optimized for devices of various types and sizes—and that incorporated screens much smaller than the screens incorporated in desktops. The organization also had to help users overcome issues such as inconsistent network coverage and quality—particularly in remote areas.

Becoming a mobile-first organization

IndiaMART is responding by becoming, for buyers, a “mobile-first” organization that meets the group’s technical and user experience requirements.

IndiaMART is also adapting its marketplace to support two key trends:
• Buyers using long, conversational sentences to conduct online searches rather than simply typing in keywords
• Non English-users—the vast majority of people in India—stepping up their use of the marketplace

“We expect that, within a few years, we will have more non-English users than English users on IndiaMART,” says Dhaliwal.

IndiaMART is also benefiting from Indian government measures to reform taxation and stimulate the digital economy. “There has been a huge focus on areas such as digital payments and the digitization of identity,” says Dhaliwal. “We have embraced elements of this agenda by implementing a digital payment platform and are continuing to look at ways of providing new digital services to suppliers.

“Meanwhile, the Indian government’s recent implementation of GST allows us to validate suppliers’ businesses and bring more qualified, more verified suppliers on our platform—improving the experience for buyers and suppliers.”

Speed and reliability an issue

IndiaMART had started operations with servers, storage, networking, and associated systems co-located in a data center in the United States. However, as buyers and suppliers increasingly used mobile devices—over occasionally unreliable networks—to access the marketplace, access speeds and reliability became an issue. With most requests traveling between India and the United States, network latency was unacceptably high. Furthermore, business growth meant IndiaMART needed an environment that could scale to meet demand for the next five to 10 years.

IndiaMART opted for a multi-cloud architecture and established criteria for cloud providers to win its business. “We required an infrastructure that could scale and meet our demand for fast response time without putting our business at risk,” says Dhaliwal. “This meant taking a phased rather than one-shot approach to the migration. We also needed to minimize any wasteful duplication of infrastructure and reduce latency. In addition, as we scaled, we needed to protect our systems, transactions and information, including the details of buyers and suppliers.”

Google Cloud team’s high-quality support

The organization performed proof of concept with the three largest multinational cloud services providers and found Google Cloud was best positioned to act as the cornerstone of its multi-cloud architecture. “The Google Cloud team gave us considerable support in helping us run a proof of concept of its services,” says Dhaliwal.

“The proof of concept also illustrated that Google Cloud was superior to the other cloud services we looked at.

“We could run our marketplace across multiple geo-locations under a single IP address, avoiding duplication, and users in India could connect to Google Cloud via the closest access point, with their traffic passing quickly across the Google network.

“In addition, Google Cloud’s load balancing service would enable encryption between load balancing layers and back ends to ensure security, while all communication would move across Google’s own protected network.”

Being one of India’s early users of G Suite, the organization was also familiar with Google Cloud applications and services.

IndiaMART then opted to work with the Google Cloud team and a certified partner on a step-by-step implementation that minimized any risk of disruption.

Deep engagement from Google

“We engaged very deeply with both Google and the partner to complete this migration,” says Dhaliwal. “The Google team worked very hard to understand our requirements and provide a solution that catered to our needs and could be deployed in a phased manner.” The team ran workshops and technical sessions with IndiaMART and, at a Google Summit, connected the marketplace provider to Google experts in databases and infrastructure.

“These discussions really helped us formulate a strategy moving forward,” says Dhaliwal.

Based on input from Google and its own evaluation, IndiaMART developed an architecture comprising virtual machine instances delivered through Compute Engine, Google Cloud’s infrastructure-as-a-service offering; Cloud Load Balancing to support cloud resources distributed across multiple locations; Cloud Pub/Sub to provide enterprise messaging; and Cloud Dataflow to transform and enrich data.

Cloud Armor works with Cloud Load Balancing to defend against distributed denial of service (DDoS) attacks; and Geocoding API helps the organization convert geographic coordinates into readable addresses and vice versa. Cloud AutoML allows IndiaMART to train machine learning models to meet its requirements. With Geocoding API, IndiaMART can matchmake buyers and suppliers based on location—providing a high quality experience for both parties. Finally, AutoML Translation allows the organization to create a custom machine learning model that converts product names from English into Hindi and other languages, effectively opening up new markets for buyers and suppliers.

Phase one complete

IndiaMART has completed phase one of the migration that involved moving its web properties across to Google Cloud. The organization is now experimenting with moving its APIs and databases to the service and anticipates completing the exercise over the coming year.

Average page load time down

The initial phase of the project has already delivered considerable benefits to IndiaMART. The organization has cut average page loading time from five seconds to three seconds, and Dhaliwal attributes close to one second of that reduction to the move to Google Cloud. “With Google Cloud, buyers and suppliers can access our marketplace much faster than previously,” says Dhaliwal. “This impacts positively on engagement, time spent on our marketplace, and the user’s entire journey with us.”

DDoS attack repelled

Google Cloud’s security features have already passed their first test. As IndiaMART undertook stage one of the migration, the business experienced a DDoS attack that generated request loads more than 400 times greater than normal. “Because we were on Google Cloud infrastructure, we could develop a solution to combat this severe DDoS attack,” says Sunil Parolia, Sr. VP at IndiaMART. “From a security perspective, this really justified our decision to go with Google Cloud.”

Google Cloud is also helping deliver the availability required by IndiaMART and the scalability to support growing demand. “As the number of people in India who access the internet grows from about 500 million to 700-800 million over the next couple of years, we will continue to build our traffic and be the dominant business-to-business platform,” says Dhaliwal. “On the supplier side, we expect to see more and more businesses come onto our marketplace—ranging from small-to-medium businesses up to larger brands. Google Cloud will enable us to accommodate this traffic without compromising the experience we provide.”