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Looking at Cloud from Both Sides Now

, | June 1, 2022 | By

by Joe Mendel – 

Rows and floes of angel hair
And ice cream castles in the air
And feather canyons everywhere
I’ve looked at clouds that way

Many of you probably recognize those lyrics that begin the Judi Collins song, “Both Sides Now”, first recorded by Joni Mitchell in 1963, which was included in Collins Album, “Cloud” the following year and recorded by many stars after in later years.  Some of you may even remember it from the 2000 movie, “Love Actually”, or the 2010 opening of the Winter Olympics Ceremony or even 2019’s, “Toy Story 4”.

It reflects the sentiment of financial services organizations of “Cloud” based services when the concept was first introduced in 1996 in Houston by employees of Compaq Computer when visualizing an “internet” of computer users via a “cloud service”[1].  It later gained some traction and press when in 2006, when large companies such as Google and Amazon began using “cloud computing” to describe the new paradigm in which people are increasingly accessing software, computer power, and files over the Web instead of on their desktops and when then Google CEO Eric Schmidt introduced the term to an industry conference. “What’s interesting [now] is that there is an emergent new model,” Schmidt said, “I don’t think people have really understood how big this opportunity really is. It starts with the premise that the data services and architecture should be on servers. We call it cloud computing—they should be in a “cloud” somewhere.”[2]

But now they only block the sun
They rain and snow on everyone
So many things I would have done
But clouds got in my way

Financial Services organizations historically are understandably risk averse and take a cautious wait-and-see approach to adopting new technologies and concepts.  But over the past decade with the advent of fintech disrupters unsettling the traditional stronghold banks had on the movement of monies, banks started to realize that they had to become technology companies that offer banking services.  Instead of “we want to sell you our products” the paradigm shifted to “we understand your unique financial needs and we can help you along your financial health journey”.  The biggest roadblock to getting there is the limitations of the 1960’s technology stack that underpins the core general ledger system.  For years banks have been relying on 60-year-old workhorse technology to support their core functions.   They have been able to push the products and services they wanted to sell to their customers with ease.

Today the paradigm is reversed, and consumers are demanding more personalized and lifestyle services that are stressing the limits of the core. And it doesn’t help that 43% of the worlds core banking systems are built on COBOL technology from the 1960’s which required them to get by using “cloud-washing” strategies by surrounding the core with updated peripherals.

The biggest business limitations of legacy mainframe core banking systems have been identified as their inability to create a unique digital experience, the speed for launching new and innovative, competitive products and services, the high costs of owning and running the platform, the inflexibility to keep up with changing risk regulatory and compliance demands, the difficulty in merging platforms in M&A situations, and the lagging velocity of being able to compete with digital-native fintech and big tech players.  Likewise, there are technical limitations also that are significant considerations, such as the lack of flexibility to meet changing customer and business needs, the difficulty with integration with third-party providers, the diminishing pool of talent (COBOL coders) who understand the systems, lack of scalability to meet business growth, ability to reach siloed and fragmented data points, challenges to upgrade due to custom code and the inflexibility to break a legacy core contract.

But banks cannot evolve and innovate and meet the needs of today’s consumers unless they move beyond legacy core platforms.   Data as the new “fuel (oil) or currency” has been replaced by “velocity” and/or time-to-market.  Banks must be aware that if they are not first to win the hearts, minds and emotions of their consumer base then someone else (challenger bank, fintech, et.) will be.

I’ve looked at clouds from both sides now
From up and down, and still somehow
It’s cloud illusions I recall
I really don’t know clouds at all

So, the initial reticence of implementing cloud-based solutions because of security and privacy concerns and the fact that it works and is a known workhorse are being replaced.  Banks are confronted by the need to reduce operating costs, cost-to-serve, eliminate legacy technical debt, improve speed-to-market, accelerate competitive advantages, rapidly test and introduce new products and services.  This is an effort to create unique one-to-one predictive and prescriptive marketing opportunities that create emotional embedded financial services into customer lifestyles.

The current fact is that a recent McKinsey report finds that more than 70% of the US banking institutions are reviewing their core platforms and that that core banking transformation is high on their list of “must-do” initiatives.  The interest is in moving from legacy mainframe system platforms, through service-oriented platforms to cloud-native platforms built “on the cloud”, and leverage microservices-based architecture with application programming interfaces (APIs), providing access to and from other internal and external services in real-time. Cloud-native describes how applications, infrastructure and microservices can take full advantage of the cloud. Using this approach, financial services organizations can build, test and deploy new products that can personalize services to customers in real-time and in ways that would not otherwise be possible with those more traditional or legacy infrastructures.

Cloud-native Core Banking

ThoughtMachine, a cloud-native core banking platform, has generated much interest in the financial services community in that they offer a purpose-built cloud-native core banking platform that has universal cloud hosting, can be hosted as a SaaS Platform or deployable by the bank in public, private and hybrid environments with a fully scalable microservices architecture.  Recent deployments include Intesa-Sanpaolo (Italy), Lloyds, Standard Chartered, Atom Bank, SEB, Curve, Al Rajhi Bank, ING, HD – Vietnam, Lunar, Kiwi Bank, Magyar Bank and in the US – Arvest Bank, JPMC, Mascoma.

Serverless Computing – the Next Evolution of Cloud Computing

But it doesn’t stop there, Kurt Wysock, Cloud Engineering Practice Head at RCG Global Services talks about the next evolution of cloud computing – serverless environments, “serverless computing is an evolution of cloud computing that removes the user’s job of installing, provisioning, maintaining, scaling up/down, and upgrading servers. It enables a simpler, more cost-effective way to build and operate cloud-native applications, in which the cloud provider allocates machine resources on-demand, taking care of the servers on behalf of their customers. For businesses, this means manual infrastructure management tasks are eliminated, so teams can focus on writing code that serves their customer’s ongoing needs.” The cost-effective and event-driven nature of serverless computing makes it a beneficial structure for the banking and finance industry. Since serverless applications maximize on-demand-only costs, when services are not required, the chargeback is zero. Financial services’ highly variable workloads (for example, recurring yet temporary risk and repricing calculations) can benefit from serverless.[3]  Kurt says some key advantages of a serverless environment are:

Lower costs Simplified backend code
Simpler pricing model Stability
Global auto scalability Improved DevOps
Focus on the business Eliminate DBA Tasks
Improved latency Agility


Cloud environments are no longer the “red headed stepchild” of the technology world and have become much more accepted and implemented within financial services.  There are many levels of adoption which continue to evolve as we speak.


  • Cloud, cloud-native, and cloud migration of systems has become a much more accepted and necessary strategy for financial services organizations to remain viable and competitive in the market
  • Whether you are migrating selected application to the cloud or considering a full core replacement it is a complex and somewhat risky initiative and it is important to have a qualified competent partner to advise and implement.
  • The competitive, financial and business benefits of moving to the cloud now outweigh the original concerns and risk factors as new technologies have made it more advantageous and cost effective to migrate.
  • While cloud based platforms offer the ability to solve your IT and data challenges, it is being increasingly used on the offense to drive new capabilities, experiences and revenue growth.
  • Digital for digital sake is not a strategy when considering a move to the cloud. Business value and customer value must always be the drivers.

We at RCG Global Services are available to help drive digital revolution through our solutions, practices and advisory services.  We help Financial Service organizations understand the complexity of remaining viable and competitive in todays on-demand, ever-evolving consumer economy by successfully solving complex business problems for financial service companies globally since 1974.  Our clients rely on us to help them harness the “speed of now” that drives evolution to the hyper-business age.  Our engagement model has evolved to provide the expertise necessary to identify evolutionary solutions and get you to digital efficiently with minimal disruption, allowing you to off-load, and de-risk your most critical strategic and competitive initiatives.

We ask questions to solve business problems.  We engineer the velocity necessary to create competitive advantage through impactful outcomes.  We make your goals a reality by compressing the time between strategy on paper, to execution, through to impact, maximizing returns on investment while creating competitive advantage.

“We prepare you today, to meet the speed of now, needed tomorrow.”

[1] Who Coined ‘Cloud Computing’?, By Antonio Regalado, October 31, 2011

[2] Who Coined ‘Cloud Computing’?, By Antonio Regalado, October 31, 2011