Every IT solution needs supporting infrastructure; the servers, switches and other items of physical equipment and platform software used to host the applications, as well as a formal programme of monitoring, housekeeping and other activity to keep things running smoothly.
Under increasing regulatory scrutiny around information security and resilience, we are seeing more and more firms moving away from in-house hosting towards an outsourced model, engaging with specialist third party organisations to provision and manage those assets in dedicated data centres, providing industrial strength networking, availability and resilience.
Hosting providers who already operate in financial services are already geared for the level of up-front due diligence and ongoing control and supervision that lenders require. This, coupled with domain expertise and real world experience implementing and supporting specific vendors’ software packages, gives clients a significant head start in setting up this type of outsourcing model, and allows a tried and tested implementation pattern to be applied and refined over time.
In recent years there has been a dramatic shift toward server virtualisation, a technology that has brought significant cost and efficiency savings by consolidating under-used infrastructure into an ever-smaller number of physical computers.
Historically, these virtual server ‘farms’ have tended to use hardware dedicated to, if not outright owned by, the client. However, in an outsourced, service-based paradigm, there is no technical reason why multiple lenders could not operate side-by-side in shared pool of computing resource, as long as there is strong security and robust isolation between tenant environments.
The latest generation of hosted solutions has seen the emergence of ‘private clouds’, large-scale shared infrastructure facilities provided in partnership between the software provider and the hosting specialist, providing their clients with a secure, reliable and proven environment in which to operate their critical applications.
This has the potential to provide the best of both worlds: secure and tightly controlled infrastructure, combined with the efficiency and flexibility that is achievable through cloud computing.