Defining the public cloud
The public cloud is simply a cloud offering made available by a third-party provider over the public internet. While “public” may imply shared space, each company has its own place within a public cloud offering, with these environments being secured by the provider.
The main advantage of choosing a public cloud deployment versus the private cloud, hybrid public/private offering or on-premise deployment is one of cost. Public clouds save companies from having to purchase, manage and maintain hardware and infrastructure, with some public cloud services being free, offered through a subscription service or through on-demand pricing schemes.
Overarching public cloud benefits
Payment players around the world are already experiencing the benefits of deploying services in the public cloud. This list includes, but is not limited to:
- Scalability and performance – Cloud systems are well known for scalability, with the use of “elastic” scaling models making it easy for businesses to scale up or down, depending on need, and only paying for the capacity being used.
- Speed of implementation – Through hosting the required tools for implementation (API gateways, access management, etc.), and the ability to rapidly alter the amount of “resource” made available and activate a new set of servers to provide a new application or service, the public cloud reduces implementation efforts and smooths friction points.
- Security – Once a sticking point, today’s top cloud providers can leverage vast resources (far larger than individual clients can spend) to provide a wide range of security policy options to match the needs of a given client.
- Lower costs – As mentioned above, capital costs are lowered by leveraging the provider’s server and storage hardware, data centers and staff.
- Local compliance – Top cloud providers have many data centers worldwide, not only providing redundancy in case of emergency, but also ensuring geographical preferences and needs can be met.
Public cloud benefits for LATAM
At any other time, cloud migration would be a natural part of the region’s payments progression — a pillar of modernization efforts. But with the COVID-19 pandemic accelerating the digitization efforts of LATAM’s payment players, the public cloud will not only be a necessity for organizations needing to reduce costs, it will also help speed up the delivery of innovative, hyper-personalized services.
A new way of banking
Until now, retail banks have been hesitant to move to the public cloud given the perceived security risks. However, the rise of challenger banks is bringing a new banking experience to the market with their cloud-native, API-led approach.
Additionally, non-banking players are set to leverage the cloud to extend their product sets into the financial services sector, further challenging big banks to respond. Given the LATAM region’s financial inclusion efforts, the cloud is becoming increasingly essential for those looking to attract new customers who may be drawn to those delivering a “bank in your pocket” experience.
The proliferation of real-time payments has created a wide array of unknowns within the region. Given that nobody quite knows how quickly volumes will rise or how these new payment types can be monetized, it makes little sense to take a traditional infrastructure approach.
The cloud’s ability to speed time to market and scale as needed makes it the ideal choice for capitalizing on the opportunities offered by real-time payments.
Since each country within the LATAM region has its own set of rules and regulations, ensuring compliance can be an ongoing challenge. The public cloud can mitigate the challenges of compliance by relying on local expertise and providing ongoing updates as needed to meet new regulations.
Like most technology, the public cloud has an evolving roadmap, which can best be described as behaving like a living organism. One of the main changes is the improvement of the cloud offering for LATAM and its availability zones. This change will address availability, latency reduction and hardware-specific requirements.
Another notable step will involve the region’s main card schemes — including local and global providers — to include regulation changes and agreements for cloud operation support.
To achieve long-term success in the cloud, institutions must partner with top vendors and regional experts. Recently, ACI announced its partnership with Microsoft to leverage Microsoft Azure to allow banks and other organizations to become more agile, lower the total cost of ownership and accelerate innovation. This partnership has already produced success for top banks within the region, including Banco Safra.
Ultimately, the question of moving to the cloud is not yes or no, but when. The first steps will almost assuredly be related to non-business-essential systems, gradually moving into core business solutions. Those who prioritize cloud migration will be well positioned to create a competitive gap through the fast development of new digital services, while also enjoying cost savings.
Find out more about ACI’s cloud capabilities and how they are helping payment players realize a world of benefits