Published on February 14, 2024 | 2 Mins Read

The banking, financial services, and insurance (BFSI) sector is ripe with complex transactions, sensitive data, and regulatory requirements. Cloud native technologies promise a symphony of agility, resilience, and cost-efficiency. But how does a BFSI enterprise transition to this new world? Let's chart the course, step-by-step.

Before diving in, we would like to underscore that cloud native is an overloaded term that can mean different things to different people. Throughout this blog post, we refer to cloud native as the set of technologies that empower engineers to make high-impact changes rapidly with minimal toil. This is in line with the definition from the Cloud Native Computing Foundation (CNCF). 

The steps below are based on working with dozens of BFSI companies through their journey and by no means they are perfect. For sure many success and failure stories depend on plenty of factors but these steps can keep you and your team focused and able to pivot whenever necessary before it’s too late. 

Step 1: Evaluate Your Current Landscape

It’s essential to assess your existing IT infrastructure. Understand the legacy systems that run your core banking applications. Ask the hard questions – are these systems resilient enough to handle market volatilities? Are they cost-effective? This initial self-assessment will lay the groundwork for your cloud native journey.

One of the most effective exercises is to assess and analyze your application portfolio. A common exercise is commonly known as application rationalization. This can help you get a sense of which group of applications are good candidates for cloud native. 

Step 2: Formulate Your Cloud Native Strategy

Crafting an overall strategy is crucial. What do you aim to achieve with cloud native? Whether it's scaling your applications on-demand, achieving faster time-to-market, or improving the customer experience (CX). 

Remember, this strategy should align with your broader business goals and regulatory compliance needs. Ideally, your strategy is going to stem from your business goals.

Cloud native is not a solution for all application or infrastructure problems. Carefully understand the benefits, pros, and cons of the different types of cloud solutions and when and where to use them. 

Step 3: Secure Executive Buy-In

Transitioning to a cloud native architecture is as much about technology as it is about culture and mindset. Securing executive buy-in is paramount for obtaining the necessary funding and instilling a cloud native mindset across your organization. 

Prepare and present a strong business case that outlines the Return on Investment (ROI) and competitive advantages to win them over. Champions inside the organization, even from other business units can help communicate the individual, team, and company benefits so that everyone is incentivized to win throughout the journey.

Step 4: Upskill Your Workforce

As you embrace cloud native technologies, your workforce must be kept up-to-date with new tools and methodologies like Kubernetes, containers, and microservices. Invest in training programs to build in-house expertise. A skilled team can navigate the challenges of cloud native adoption more effectively and sometimes will make or break a project or initiative.

In the real world, it’s rarely the case that one team is successfully delivering business value using technology because of a particular vendor, tool, or solution but rather because of the level of mastery, operational excellence, and speed to deliver value back to the business and delight the customers along the way.

Step 5: Start with a Pilot Project

Dive in with a controlled, manageable project. Choose an application that's non-critical but still significant enough to provide insights and value. This pilot will act as proof, both for the technical aspects of implementation and for the adaptability of your team.

Identify a dozen or so of stateless applications for the first iteration. This will give you enough pool to choose from in case things don't work the first time around. The first iteration won’t be easy but as you learn from it, the second iteration will be easier, and so on. Later on, you can start experimenting with critical or stateful applications.

Step 6: Embrace DevOps Practices

Cloud native goes hand in hand with DevOps. Integrate your development and operations to streamline processes – think Continuous Integration and Continuous Deployment (CI/CD), automation, and agile methodologies. DevOps not only accelerates deployment cycles but also enhances cross-team collaboration.

This includes things like monitoring, logging, tracking, Infrastructure-as-Code(IaC), secure CI/CD,...etc. 

Not getting this right can be detrimental since going cloud native is supposed to get you faster to market and be able to deploy in minutes not months. This can’t be done by adopting cloud native and not having a solid foundation based on DevOps practices, a learning culture, and team spirit. 

As you advance on your journey, consider platform engineering, not as a replacement for DevOps but rather as an enabler to consume cloud native at the enterprise level. 

Step 7: Engage with Trusted Partners

You don't have to go it alone. Partner with experienced cloud providers, startups, or consultancies that have a track record in BFSI implementations using cloud native. They can help avoid common pitfalls and accelerate your cloud native adoption with industry best practices.

The other option is to keep iterating, learning, and eventually get there. A rapid ROI or payback can make or break your adoption journey so make sure you reach out for help and get it if you need it. 

Step 8: Secure, Scale, and Optimize

With a successful pilot under your belt, it's time to scale. Roll out cloud native practices across more critical applications, always with an eye on performance, costs, and security. 

For many organizations, security is an afterthought and that could be disastrous, especially in a regulated sector like BFSI.  Organizations that reap the benefits of cloud native are those that treat security as a first-class citizen and integrate it into every step of the Software Development Lifecycle Cycle (SDLC). 

Step 9: Monitor, Govern, and Ensure Compliance

As your organization becomes increasingly cloud native, continuous monitoring and governance become imperative. Implement robust governance frameworks to manage costs, performance, and compliance with financial regulations.

This can be enforced using Compliance as a Code(CaC) and Policy as Code (PaC) technologies to make sure nothing falls off the cracks.  

Step 10: Foster a Culture of Continuous Improvement

Finally, embracing cloud native is an ongoing journey, not a destination. Build a culture that encourages innovation, continuous learning, and resilience. Such a culture will empower your organization to stay ahead in the dynamic BFSI landscape and be ready to benefit from the next wave of digital, be it artificial intelligence (AI), quantum computing, or who knows what instead of always playing catchup.  

Like any technology in the enterprise, there are success and failure stories adopting cloud native. Although every BFSI enterprise's journey will be unique, these steps can guide the transformation towards a cloud native future – one that promises both challenges and immense opportunities. 

Remember, the journey is complex, but the rewards are well worth the effort.