In our previous post, “Navigating the Clouds: The Truth About Cloud-Hosted vs Cloud-Native Core Banking Solutions“, we broke down the difference between cloud-hosted and cloud-native core banking solutions. But some of you wanted to know – why are cloud-native solutions considered superior when it comes to scalability, risk, flexibility, and performance? Let’s dive in.
Think of your core banking software as a house. A cloud-hosted solution is like renting a mobile home on someone else’s property. Sure, the property owner (cloud provider) supplies the infrastructure, but the house itself wasn’t purpose-built for that land. Similarly, a cloud-hosted core banking system runs on rented cloud infrastructure without being natively designed for it.
A cloud-native solution, on the other hand, is akin to constructing a home engineered specifically for the property it occupies – a raised concrete beach house made for sandy shores, or a log cabin tailored to a woodsy retreat. It leverages the full capabilities of the cloud infrastructure it’s deployed on.
Now, let’s explore why cloud-native solutions rate higher across key considerations:
Scalability Because cloud-native is custom-built for the cloud, scaling up or down is virtually instant and limitless. Need more capacity? Add it with a click. Cloud-hosted options may struggle with scalability since they weren’t designed for elastic cloud architectures.
Risk Cloud-native solutions are built from the ground up to run efficiently and securely on cloud infrastructure, minimizing risks. Cloud-hosted options can’t fully leverage cloud-native security, resilience, and operational capabilities – increasing risk exposure.
Flexibility Evolving business needs and tech innovations? No problem for cloud-native solutions engineered for adaptability. Cloud-hosted options may struggle to bend as seamlessly.
Performance Smooth as butter – that’s how cloud-native solutions run on the infrastructure they were custom-made for, enabling optimum performance and rapid deployment cycles. Cloud-hosted alternatives weren’t optimized for the cloud, so performance can suffer.
While cloud-hosted solutions may seem cheaper upfront, they can’t unleash the full power of the cloud like cloud-native alternatives. For banks/credit unions seeking true scalability, lower risk, flexibility, and top performance – cloud-native is the apex choice.
Of course, your specific requirements and strategic vision should ultimately guide the cloud approach. But now you understand why an authentic cloud-native core banking solution can be a game-changing investment in future-proofing your technology.
Found this article interesting? Check out these three related reads for more.
- Cloud-hosted vs. Cloud-native core banking
- Core banking hosting options – In-house vs. Cloud hosting
- Cloud computing in core banking security – The future of banking technology
#CloudNativeBanking #CoreBankingAdvantages
