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Cashing in on Hybrid Cloud: A Digital Imperative for Financial ServicesBest Practices for Transitioning to a Modern, Cloud-Ready IT Foundation that Improves Agility and Flexibility While Reducing Costs

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01 Cloud Adoption Is on the Rise in Financial Services

02 Why Hybrid Cloud?

03 Business Drivers Accelerate Investment

05 VMware’s Approach: Hybrid Cloud at Your Financial Institution’s Pace

06 A Financial Services Cloud, Powered by VMware

07 Cloud Progress in Financial Services

08 Best Practices for Transitioning Your Financial Business to Hybrid Cloud

15 Move Your Financial Services Organization to Cloud with VMware

Contents

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Cloud Adoption Is on the Rise in Financial Services Is your financial services organization moving quickly to lay the IT groundwork for on-going digital transformation? Are you expecting growth goals to be catalyzed by modern IT approaches such as cloud that redefine the customer experience, boost operational efficiency, and maintain data privacy? If so, there’s good news.

Recent advancements in cloud delivery models have addressed multi-cloud management, security, data privacy, regulatory, and risk concerns. So there’s no better time than now for your financial services organization to embrace hybrid cloud services to advance business agility.

More than 40 percent of bankers reported cloud computing initiatives are currently underway at their institutions, in a recent American Banker survey about how technology is shaping the bank of the future. Among bankers at institutions considering, piloting, or implementing cloud deployments, nearly three quarters expect the initiatives to have a moderate-to-high impact over the next year and at least 82 percent expect the initiatives to have a moderate-to-high impact in five years.1

Backup or recovery of data, as well as disaster recovery are the primary reasons financial services organizations rely on multiple cloud platforms today. Cost reduction, greater choice of app and development frameworks, and speeding software development closely follow, illustrating the ways in which cloud have become central to strategic IT decision making.2

1 American Banker. “How Technology Will Shape the Bank of the Future,” October 2017.2 Forrester Data, Global Business Technographics® Infrastructure Survey, 2017

WHY DO YOU USE MULTIPLE CLOUD PLATFORMS?

For backup/recovery of data, toleverage cloud storage services

For disaster recovery, to use cloudas a DR site and/or recovery option

To reduce our data center footprint

To take advantage of di�erent service level/performance on di�erent cloud platforms

Because di�erent users requiredi�erent cloud services

To bridge cloud-native, SaaSand/or packaged apps, which run on di�erent platforms

Compliance requirements that limit where we can deploycertain apps/data

To lower compute costs/lower-costcompute infrastructure

Base: 163 infrastructure decision-makers whose firms are planning-implementing-expanding hybrid cloud

Source: Forrester Data, Global Business Technographics®Infrastructure Survey, 2017

35%

31%

29%

24%

23%

23%

23%

23%

What are the benefits of using hybrid cloud platforms or environments?

Improved security and compliance

Better IT cost management overall

Improved data management

Improved IT infrastructure managementand flexibility

Access to a broader range of apps and servicesthan with only one cloud environment

Improved disaster recovery and/or business continuity

Improved app or infrastructure performance

Lower compute costs overall

Lower storage costs overall

Access to temporary or peak capacityto meet demand spikes

Base: 163 infrastructure decision-makers who would describe their cloud strategy as “hybrid”Source: Forrester Data, Global Business Technographics® Infrastructure Survey, 2017

34%

32%

32%

32%

28%

27%

26%

26%

26%

24%

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Why Hybrid Cloud? Company-owned data centers remain central to financial services’ IT operations. A majority of workloads live on-premises, especially mission-critical banking applications that require greater control and security. Recognizing that public cloud services can also serve some applications well, financial firms are looking to shift to a more agile, hybrid cloud model that leverages both private and public cloud to meet business needs.

IT leaders in financial firms recently reported deploying hybrid cloud can yield significant benefits:

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Business Drivers Accelerate InvestmentBecause cloud is a strategy, not a destination, VMware works closely with financial services organizations globally to first identify the top business challenges IT teams anticipate cloud can help solve.

• Speed New Service Delivery at Lower Costs – Financial enterprises want to tap the power and lower-cost capacity of cloud to reduce cycle time, improving when, where, and how new services are introduced. With hybrid cloud, banks can flex and pay only for consumed resources—from storage to memory to processing power—gaining tremendous efficiency benefits.

• Enhance Security – Financial firms seeking ways to prevent brand-damaging breaches are discovering fully integrated, multilayered security across clouds and services with policy-based governance from cloud vendors with strong data security and privacy capabilities make their firms more comfortable running certain applications in the cloud.

• Consolidate & Modernize Data Centers – Significant financial merger and acquisition activity has contributed to data center sprawl and challenged IT to consolidate workloads.Virtualization and hybrid cloud services are becoming an ideal strategy to eliminate computing silos and expand data center capacity to support occasional peak loads without adding hardware or over-provisioning with the benefit of transitioning from a capital to an operating cost model.

• Modernize Applications – As employee demands increase, financial institutions are looking to hybrid cloud to speed the provisioning of application development and testing environments, as well as optimize access to cloud services and modern apps (e.g., web, cloud-native, and SaaS).

• Migrate Applications – Legacy workloads, too critical to rearchitect or rewrite, are now under consideration for selective migration to hybrid cloud as an evolution strategy for financial institutions. In addition to significantly reducing migration effort, cost, and schedules, the right hybrid cloud helps ensure consistent management and monitoring of all workloads across clouds.

• Manage Performance and Contain Costs – Because oversight remains important, financial firms are looking to proven hybrid cloud providers for the interoperability that enables IT to use existing tools and skill sets to manage across clouds and to easily move apps back on-premises should there be negative impacts to budgets or app performance.

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Yet Concerns RemainFinancial services organizations report security, privacy, and managing compliance levels across environments as top worries when moving to the cloud.3 For your business to achieve cloud computing’s efficiency and cost benefits, it’s imperative to have a good understanding of the needs of your workloads. Otherwise, short-term decisions may be incredibly risky and actually set your strategic plans back.

Strategic Questions

Only when you understand your workloads—and how they translate into meeting your top business requirements for moving to cloud—can you build a strategy to ensure those workloads always have what they need. Consider your answers to the following questions:

• What apps have you designed to run in multiple data centers? Which are best suited for cloud, and which cloud?

• How much does it cost to run them, and are there hard-coded hooks into the current infrastructure?

• Are there times when you need more computing power, for example, new offer launches, when payment processing spikes?

• What are the security, compliance, and regulatory implications of migrating applications to the cloud?

Requirements for Hybrid Cloud Success

For cloud to become a critical element of your modernization strategy, you need a single, consistent, familiar experience across your data center and cloud environments. VMware Cloud provides it.

Business Drivers Accelerate Investment (cont’d)

3 Forrester Data, Global Business Technographics® Infrastructure Survey, 2017

Choice – IT can run, manage, connect, and secure the entire application portfolio on any cloud to any device.

Security and compliance – IT gains multi-layered security across clouds with a ubiquitous software layer.

Cost transparency – IT can spin up POC and training environments easily in the cloud— AWS, IBM Cloud, Azure, Google Cloud, VMware Cloud Provider Program—improving agility and controlling capital costs.

Lower TCO – Teams leverage existing skill sets and tools, gaining operational consistency and helping to prevent rising costs.

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VMware’s Approach: Hybrid Cloud at Your Financial Institution’s PaceCloud-first digital transformation includes adopting a hybrid model that helps grow and streamline your business. This can help to mitigate the business impacts of agile, fintech start-ups and rapidly evolving payment technologies.

VMware Cloud Foundation™, which includes industry-leading VMware vSphere®, VMware vSAN™, and VMware NSX® virtualization technologies, provides the simplest way to build an integrated hybrid cloud. It features a complete set of software and services for compute, storage, networking, security, and cloud management to run enterprise apps—traditional or containerized—in private or public cloud environments. It is easy to operate with built-in automated lifecycle management, providing the ultimate cloud extensibility and freedom.

With VMware, your financial firm can choose the best approach to meet a particular business need, for example, maintain a private cloud on-premises and expand it to the public cloud for DevTest, disaster recovery (DR), or seasonal spikes, or rely on hybrid cloud to run modern apps and frameworks.

Consistent andsimple to operate

Ready for VMsand containers

Compatible acrosson and o prem

Hybrid Cloud Platform

Private Cloud Public Cloud

MARK CRESSEY, SENIOR VICE PRESIDENT AND GENERAL MANAGER, IT HOSTING SERVICES, LIBERTY MUTUAL INSURANCE

The private cloud has about 70 percent of the production and non-production workloads at Liberty Mutual running in it. We’re also embracing the public cloud. At this point, we’re thinking about how we can move from a rich, well-adopted, on-premises private cloud to a hybrid cloud that takes advantage of all the capabilities in the public cloud environment. We want to make sure we’re leveraging the public cloud in a way that’s stable and reliable, and still lets the business do its job.

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A Financial Services Cloud, Powered by VMware State Bank of India (SBI), a Fortune Global 500 corporation, has a 200-year history of serving clients, with more than 22,000 branches across India and 190 offices in 38 countries around the world. SBI is leading a digital transformation that is driving technological innovation, while making banking faster, more secure, and widely accessible to traditionally underserved populations.

SBI and VMware Partner to Build and Run the Largest Financial Services Private Cloud in India

Today, SBI runs one of the largest private clouds in the country called “Meghdoot,” which is highly automated with 250+ production applications on 2,000+ virtual machines. Meghdoot has helped SBI cut application provisioning time and reduced infrastructure costs. The highly advanced cloud is powered by VMware vCloud Suite® and VMware NSX.

Results

• Application provisioning time decreased from months to days.

• With 50 million mobile transactions daily, downtime has been reduced to a few hours each year.

• Infrastructure costs dropped by 80 percent.

• Scale-up availability and speed of on-demand IT service delivery powers innovation and drives customers to adopt new technology.

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We’re virtualizing a core banking teller application and other branch applications—loan system, trade finance, and others—on the largest BFSI private cloud on the planet.

MRUTYUNJAY MAHAPATRA DMD CIO, STATE BANK OF INDIA

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Cloud Progress in Financial ServicesIf your financial services organization isn’t strategizing or already moving to hybrid cloud, you risk being left behind. Almost 80 percent of financial services organizations recently surveyed have either deployed hybrid cloud or are in the process of deploying in the next 12 months.4

4 Forrester Data, Global Business Technographics® Infrastructure Survey, 2017

How far along are you in your implemenation of hybrid cloud?

1%

No immediate plans(within the next 12 mo.)

Base: 163 infrastructure decision-makers who would describe their cloud strategy as “hybrid”Source: Forrester Data, Global Business Technographics® Infrastructure Survey, 2017

40% 39% 20%

Planning to implementwithin the next 12 mo.

Implementing/Implemented

Expanding/upgradingimplementation

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Best Practices for Transitioning Your Financial Business to Hybrid Cloud As you progress, there are six best practices to keep in mind to maximize success on your hybrid cloud journey:

1. Modernizing your data center is building for cloud.

2. A common set of cloud management capabilities reduces complexity and improves operational efficiency.

3. Your existing staff can be a huge asset.

4. You shouldn’t have to rewrite applications or code.

5. Integrated security is a must-have everywhere.

6. There’s a highly reliable platform that supports cloud adoption at your business’s pace.

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Through VMware’s comprehensive virtualization solutions, we were able to transform our banking services from manual to digital, accelerating the time it takes to deliver new, always-on online services to millions across the country. This has significantly reduced overall costs and server provisioning time, while boosting security and capacity utilization.

THAN HTIKE SOE @ NELSON TAN, HEAD INFORMATION OFFICER, MYANMAR ORIENTAL BANK

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Modernizing Your Data Center is Building for Cloud Digital transformation is driving rapid and fundamental changes in financial services businesses and operating models. To support ever-changing requirements, your IT organization must similarly transform its data center.

VMware’s innovative software-defined architecture of natively integrated compute, network. and storage virtualization technologies, together with automation and management, enables financial services institutions to modernize infrastructure, automate the delivery and management of IT services, and run modern cloud-native and microservices-based applications. This software-defined approach delivers cloud service provider agility and economics in the data center, and extends to an elastic hybrid cloud environment.

1.

Myanmar Oriental Bank deployed VMware Software-Defined Data Center (SDDC) solutions, including VMware vCloud® Suite, VMware NSX and VMware vSAN, to enhance enterprise agility, flexibility, security, scalability and ultimately, overall efficiency. It decided on VMware solutions as VMware had proven to help major financial institutions in the region be highly successful in their digital transformation journeys.

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VMware Integrated OpenStack gives us tremendous flexibility and enables us to change as needed much quicker. We can choose any cloud management control tools, and we can leverage the same automation for all cloud platforms.

ISA BERISHASENIOR DIRECTOR, PLATFORM & APPLICATION INFRASTRUCTURE ENGINEERING, HEDGESERV

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A Common Set of Cloud Management Capabilities Reduces Complexity, Improves EfficiencyVMware’s cloud management platform unifies the management of public, private, and hybrid cloud resources, enables the automation and delivery of applications, and streamlines operations across clouds. A well-architected, enterprise cloud management platform delivers the following key benefits to financial institutions:

• Agility– Every bank needs to move faster in today’s digital business climate. VMware’s automated provisioning capabilities are particularly important to software development teams, which are under constant pressure to accelerate time to market for new financial services applications and software updates.

• Efficiency – Many new demands are being placed on financial IT organizations, but there typically isn’t a lot of funding to meet those demands. A cloud management platform can help increase your IT team’s efficiency by automating repetitive tasks—both modern and legacy—as well as improve the utilization of in-house and cloud-based data center resources.

• Control – One of the greatest IT concerns with the move to cloud-based services is the risk of losing control of critical banking business applications and their associated data. An enterprise cloud management platform helps you maintain, or increase, visibility and control of your company’s assets, regardless of where they reside. The platform gives you the right level of control to support your needs in the quest to balance agility, risk, and cost dynamics.

• Choice – A hybrid cloud environment, managed by a cloud management platform, enables your IT team to leverage heterogeneous on-remises resources, including a hypervisor such as vSphere, along with any number of public clouds. This flexibility makes it possible to match the right hybrid cloud services with the particular requirements of individual business units, application owners, and development teams for an optimal service delivery strategy.

2.

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More than 70 percent of IT executives report their company has lost revenue due to lack of skills by the staff.

THE LONDON SCHOOL OF ECONOMICS, THE COST OF CLOUD EXPERTISE REPORT

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Your Existing Staff Can Be a Huge AssetYou shouldn’t have to hire new staff to implement your cloud strategy. Evolving to a modern foundation with VMware allows your financial services organization to take advantage of having the same architecture and operational experience both on-premises and in the cloud. This makes it easier for central IT and individual offices, such as bank branches, to gain greater agility with private and public clouds while most IT operations, governance, and security remain enterprise-level functions.

Trusting your existing IT staff—that already has expertise running current investments—to help evolve the sprawling and complex IT ecosystems found in your financial services organization is simply a smart move. Existing employees can seamlessly extend their VMware compute virtualization skills and technology experiences to natively integrated virtualized storage, networking, and even desktop services in a software-defined solution. By leveraging current tools, skill sets, and solutions, your team can move faster to achieve digital transformation goals without disrupting your operations or budget.

3.

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Private Cloud Public Cloud

Customer Data Center

VMware CloudInfrastructure

COMPUTE STORAGE NETWORK COMPUTE STORAGE NETWORK

VMware Cloud on AWS

VMware Cloud Infrastructure

AWS Global Infrastructure

AWS Services

vCenter vCenter

WITH VMWARE CLOUD ON AWS, YOUR FINANCIAL INSTITUTION CAN

• STRENGTHEN SECURITY AND STREAMLINE COMPLIANCE

• ACHIEVE FLEXIBILITY, OPTIMIZE COSTS, AND INCREASE EFFICIENCY WITHOUT COMPLEXITY

• LEVERAGE EXISTING TEAMS, SKILL SETS, TOOLS, AND PROCESSES

You Shouldn’t Have to Rewrite Financial Applications or Code VMware supports an open and interoperable approach to hybrid cloud, saving IT teams the time and hassle associated with reinventing, replatforming, and rewriting application code. VMware has teamed with leading public cloud providers to ensure access to cloud services globally with consistent infrastructure and operations. Additionally, VMware and VMware Cloud Providers help ensure institutions are choosing an infrastructure platform that gives them freedom and control today and into the future. There’s no rewriting of apps, security, and networking policies required when moving workloads to the cloud (or back) with VMware’s approach to hybrid cloud.

An Example Hybrid Cloud: Two Leaders, One Solution

VMware Cloud™ on AWS, powered by VMware Cloud Foundation, is a best-of-breed commercial cloud solution that eliminates the complexity and intensive resource management required to adopt hybrid cloud. The jointly engineered hybrid cloud solution brings the benefits of hybrid cloud using VMware SDDC technologies—virtual compute, storage, and networking—to the AWS Cloud. VMware Cloud on AWS removes traditional barriers to hybrid cloud portability by supporting workloads on-premises and in the public cloud using a common operating platform.

4.

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Integrated Security is a Must-Have Everywhere Financial institutions adopting hybrid cloud must also solve challenges around networking, security, and policy management across environments. Keeping data and information secure is not only mandated by regulatory guidelines, it’s imperative for business success. That’s why every financial services organization transitioning to the cloud should develop a zero-trust environment.

By implementing VMware NSX, we are connected to our own Helvetia Private Cloud, and have the option of outsourcing workloads into external clouds in a safe manner and thus run a cross-cloud strategy.

MICHAEL WELTE, HEAD OF SERVICE AND CLOUD MANAGEMENT, HELVETIA

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5.

With VMware NSX for network virtualization in combination with VMware vCloud® Suite and security tools of other providers, Helvetia, a Swiss insurer, found a solution that supports its data security priorities, while enabling IT to provide the necessary availability resources for operating the business at any time.

Using VMware NSX and VMware vRealize® Automation™ technologies together, IT staff can model complete, multitier application environments that bake in network and security policies. Efficiency is greatly improved through repeatable processes, seamlessly delivered time and time again. Through native integration of vRealize Automation and NSX, IT can standardize delivery and reduce manual overload, leverage micro-segmentation to protect east-west traffic and secure applications easily and consistently, regardless of where they run, and throughout their lifecycle.

With VMware, Helvetia has experienced

• Fast and secure provisioning of standardized systems and infrastructures

• Higher degree of automation

• Increased efficiency and business continuity

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There’s a Highly Reliable Platform that Supports Cloud Adoption at Your Business’s Pace VMware Cloud supports seamless bi-directional application portability and migration, so your financial services business can run workloads where you want them, depending on business needs. You benefit from both the speed of live migration of workloads between on-premises and public clouds and optimized workload distribution, which saves time and money by preventing downtime.

Minimize Disruption

Because VMware technology supports high availability, your IT staff can be sure that in the event of a failure, affected software is automatically restarted on another production server with spare capacity. With VMware, you minimize downtime and service disruption at lower TCO.

Consistently Meet Business Needs

The adoption of cloud and the migration of legacy applications and other workloads to private, public, and hybrid clouds are strategic decisions that can help transform your business. That’s why it’s critical to build on a foundation that delivers the ultimate in flexibility, interoperability, and ease of management across clouds. VMware supports the seamless move of the applications you choose, to the cloud you want, at your own pace, as your business demands.

Software-defined everything is a critical foundation and enabler for getting the results that we want to get out of real cloud adoption. VMware software-defined data center solutions are the foundation of our cloud strategy. We are seeing a lot of successful outcomes in terms of agility for both IT and the business.

PIERGIORGIO SPAGNOLATTIHEAD OF INFRASTRUCTURE, BANCA POPOLARE DI SONDRIO

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“6.

Move Your Financial Services Organization to Cloud with VMware

Faster service delivery demands and top-line revenue pressures are providing the impetus your financial services IT and business teams need to move cloud strategies forward. And the timing couldn’t be better. There is greater growth in the sophistication, stability, security, and types of cloud applications, solutions, and support services than ever.

As an integral part of their digital transformation strategies, financial services organizations worldwide are choosing VMware hybrid cloud solutions to overcome scalability, availability, and budget challenges. They are modernizing IT foundations with VMware to improve agility, speed of service delivery, and security at lower costs. Familiar VMware technology already in your data center extends to private and public clouds, enabling your on-premises infrastructure to continue to deliver high ROI. Existing teams with the right skillsets are also already in place to move your cloud strategy forward.

Your financial services organization’s ability to drive revenue growth and embrace new business models, as well as attract and retain customers with innovative products and services while meeting the requirements of regulators will depend on your IT flexibility. Following best practices and leveraging continuing advancements in cloud delivery models make now the ideal time to adopt a hybrid cloud solution that optimizes business agility, enhances user experiences, minimizes cost, and reduces risk.

Adopt a hybrid cloud strategy. Learn more. > Web@http://www.vmware.com/go/financialservices

> Twitter@vmwarefinserv

> VMware Financial Services Blog@https://blogs.vmware.com/industry-solutions/financial-services

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