Cloud Computing Application in Banking: Appropriate Strategy Needed

Phan Thai Dung, Deputy Director of Information Technology Department under the State Bank of Vietnam (SBV), said the biggest challenge in cloud computing in banking operations is banking data security and customer confidence. In the angle of users, data security lines in basic features such as access, navigation and ownership. From the angle of vendors, they carry out all solutions with a lot of commitments to confirm that the user data are absolutely protected in the cloud. However, this cannot convince important customers because, if the data is the soul of an organisation, they obviously do not want to give the right to keep their soul to someone else. This is the biggest challenge for cloud computing application in banking operations in Vietnam in particular and other sectors with important data in the economy in general. Besides, the lack of a legal framework for IT leasing services, IT auditing, service quality assessment, complaint handling and compensation is also a major obstacle.

 

On the deployment of cloud computing in banking operations in Vietnam, the Prime Minister’s Decision No 80/2014/QD-TTg on IT leasing services in State agencies, effective on February 15, 2015, is considered a signal paving the way for the outsourcing of IT services in government agencies to optimise costs and increase productivity and performance of human resources management.

 

Citing a credit institution survey by the SBV Information Technology Department in the first quarter of 2014, with 31 out of 35 banks responded on cloud computing application in banking operations, Mr Phan Thai Dung said, 24 banks (77 percent) surveyed have plans for cloud computing application in banking operations as of the end of December 2014, of which 16 banks (67 percent of banks with application plans) will choose private cloud, three opt for public cloud (public) and six prefer hybrid cloud. Survey results reflect the agility of domestic banks to new technologies. However, he added that if banks choose private cloud computing, they will not get considerable benefits from that cloud computing generates. Private cloud computing environment allows absolute control over IT resources, application of strict security measures and the banks will have to operate and maintain IT systems on their own.

 

At a recent Banking Vietnam Workshop 2015 in Hanoi, experts recommended that, to optimise costs without affecting data security, hybrid cloud computing is considered more appropriate. While maintaining IT infrastructure for important applications like corebanking and customer management on their own, credit institutions may outsource IT service for testing environment, application environment and training environment. The separation of private cloud and public cloud applications depends on data security strategies of credit institutions.

 

Regarding recommendations on cloud computing deployment in banking operations in Vietnam, Mr Dung advised that cloud computing construction is a process that banks should begin from the process of centralisation and virtualisation of server infrastructures and networks. Building cloud is not difficult but administrating it will be a very hard task that requires the professional operation of IT organisations. This will take a lot of time and resources. Besides, with IT outsourcing trends, using public cloud computing services is also a suitable option for small-scale banks with limited investment costs and IT resources. But, the selection of service vendors is very, very important to ensure the confidentiality of information and safety of active data and continuous operations of information systems.