Fintech's Multi-Cloud: Why It's Happening & How to Do It Right

In the dynamic world of fintech, where milliseconds can mean millions, the trend of adopting multi-cloud strategies is on the rise (Flexera reports that 89% of organizations have a multi-cloud strategy). Every time there is downtime in any system that deals with financial transactions, the consequences could be dramatic. No matter how your system handles failures, relying on a single cloud provider exposes your services to what I call an unmanaged failure; no matter what you do, if your cloud provider is down, your system will be unreachable. 

Today, we’ll discuss the multi-cloud trend in the fintech world, and its challenges, and share some tips.

So, Why Are Fintechs Implementing Multi-Cloud Strategies?

Simply put, they're not putting all their eggs in one basket. A multi-cloud strategy means using services from different cloud providers—think AWS, Azure, Google Cloud, etc.—instead of relying on just one. It's like having a diversified investment portfolio but for your infrastructure. Like a diversified portfolio, it’s unlikely that all the providers will be down at the same time; with a multi-cloud strategy in place, the impact of a cloud provider downtime on your systems and company is minimal.

There are several reasons why the fintech industry (and many others) is transitioning to multi-cloud architectures:

• Resilience and Reliability — If one cloud provider goes down (it happens, just take a look at the AWS post-event summaries!), you have a backup. Your customers will experience minimal business interruption unless your observability platform and middleware are poorly configured and there is a substantial time gap when the system switches to a different cloud infrastructure.  
• Avoiding Vendor Lock-In — No one likes being held hostage by a single provider. Multi-cloud gives you the freedom to choose (and switch) who you work with and to negotiate better prices if you are an enterprise customer. Strategically, when you bring two or more vendors to fight for your business, you will start driving in the front seat.
• Flexibility — Different clouds have different strengths. A multi-cloud approach allows you to pick the best tool for each job. Just simply think about the different AI tools that AWS, Azure, and Google Cloud provide and which ones match the needs of your business.
  Agility — Fintech companies are like chameleons; they need to adapt quickly to ever-changing market conditions and regulations. Multi-cloud strategies provide the agility to deploy applications and services across various cloud environments and tools enabling fast but reliable adaptation patterns.
• Regulatory Compliance — Financial services have strict data storage rules. Multi-cloud helps navigate these regulations by strategically placing data. Similarly, when you operate across multiple geographies that have different privacy and data residency regulations a specific cloud provider could potentially offer a better solution compared to the others.
• ​​Scalability on Demand — Multi-cloud, as a single-cloud approach, gives you the flexibility to burst into different clouds with additional resources when needed and scale back down when needed. 
  Geographical Reach and Low Latency — Different cloud providers strategically place data centers around the world. By leveraging a multi-cloud setup, you can distribute your applications and data closer to your target markets, which decreases latency and improves performance for users in different regions.

Implementing a multi-cloud strategy is like having a Swiss Army knife for your cloud infrastructure—versatile but with many moving parts. 

At a very high level, to implement a multi-cloud architecture, you'll typically need the following.

Cloud management platform

This acts as a centralized control panel to manage resources across different cloud providers, often with features for cost optimization, resource allocation, and security monitoring. Think of it as the air traffic control tower for your cloud fleet. With a cloud management platform properly configured you save time and money, and offer visibility on the performance of your multi-cloud infrastructure.

Cloud orchestration 

This layer acts as an intermediary between the user and multiple cloud providers, abstracting the complexities of interacting with different APIs and services. It's like having a universal translator for your cloud conversations. The benefit of adding an abstraction layer is to reduce your dependence on specific services. If you’re no longer satisfied with your provider, or if you want to distribute your services across multiple cloud providers, you can use your orchestrator to provision replacement infrastructure without impacting your customer experience.

Integration tools

These tools ensure seamless data transfer and communication between different clouds, often using APIs, connectors, or even custom-built solutions. They're the glue that holds your multi-cloud world together. In a multi-cloud environment, applications and databases run on different cloud service providers. Maintaining an efficient, secure flow of data can be challenging. 

Security solutions

Given the increased complexity of multi-cloud, robust security measures are crucial, including identity and access management, data encryption, and threat detection across all cloud environments. As we know, with great power (or cloud) comes great responsibility. Topics such as authentication, security posture, and access management to cloud resources are now more important than ever as cyberattacks are now a common and increasingly serious threat to most businesses.

Each of these components adds another layer of complexity to the system, like a multi-layered cake. And as with any complex system, there's always the risk of something going wrong. But hey, at least you'll have plenty of clouds to cry on if it does! (Just kidding... kind of.)

The Perks of Going Multi-Cloud

Think of a multi-cloud strategy as a finely tuned orchestra, with each cloud provider playing a unique instrument. This symphony of services can harmonize to create a melody of benefits that brings your business to a new level of reliability and efficiency. By diversifying your cloud infrastructure, you're not just mitigating risks – you're opening doors to improving your services' performance and cost-effectiveness.
For fintech businesses, going multi-cloud can be a game-changer because this strategy will help your company (at least) in the following areas.

Reduced costs

It's not just about reducing the cost to make your revenues look better. With multi-cloud, you're unleashing competition between your providers. Cloud providers are constantly contending for your business, so you can leverage their hunger for market share to negotiate better deals and pricing. On top of that, you can allocate dynamic cloud resources across different providers to optimize costs. 

Performance boost

Optimize workloads by picking the cloud that best suits each task. The result? Faster and more efficient operations. By choosing between different cloud service providers with a wide geographical footprint, a company can strategically position its data centers closer to its users. 

Innovation

Experimenting with different cloud offerings can spark new ideas and solutions. A multi-cloud architecture's flexibility allows for a mix-and-match approach based on specific needs (e.g., AWS for competitive virtual machine prices, Google Cloud for advanced machine learning capabilities, Azure for seamless integration with Microsoft services) that enables creativity and innovation within your company.

Data gravity

Data gravity is the idea that data, like a massive celestial body, attracts applications and services towards it. The bigger the data set, the stronger the pull, making it more complex (and costly) to move or process that data elsewhere. By distributing data across different cloud providers, you're essentially breaking up that massive data monolith into smaller, more manageable chunks. This approach reduces the "gravitational pull" of any single data set, making shifting from one cloud service provider to another easier.

But, Hold On! Multi-Cloud Ain't All Rainbows and Unicorns

Setting up a multi-cloud infrastructure is a complex undertaking that requires a deep understanding of various cloud platforms, networking, security, and integration intricacies. We're talking about juggling multiple cloud providers, each with unique quirks and APIs, while ensuring seamless communication and data transfer. Most organizations don't have the in-house expertise to tackle this task independently.

When you start your journey, you must be aware that you are not just dealing with managing multiple vendors but with additional tools and new technologies.

For instance, you might bring in Apache OpenStack as your cloud management tool, orchestrating virtual machines and resources across different clouds. It's like having a seasoned conductor keeping everyone in sync, but it also means learning a whole new set of rules, configurations, and best practices.

Then, you might need to introduce OpenShift to manage portable application bundles (think Docker containers) across different cloud platforms. It's a powerful tool but adds another layer of abstraction and complexity to your infrastructure.

Another component to add to your tech stack is something tailored to managing data across different cloud environments. For instance, tools like MiniIO multi-cloud data storage are great for ensuring data availability and resilience, but they also mean managing yet another interface and set of configurations.

Each tool introduces complexities: learning curves, integration challenges, potential conflicts, and the ever-present risk of misconfigurations. Even more, there are many tools on the market, and your success depends on picking the right ones with the appropriate level of freedom and support.

Once you pick your tools, you have to make some strategic decisions on the distributed and redundant deployment patterns. There are at least four distributed deployment patterns to follow when you start the migration to a multi-cloud environment.

Tiered hybrid pattern

This pattern involves gradually moving applications, starting with simpler ones. Each application requires an architectural decision (rehost, re-platform, repurchase, refactor, retain, retire). After migration, applications access the backend through an API gateway for centralized security and management.

Partitioned multi-cloud pattern

Internet applications can experience extreme fluctuations in usage. This architectural pattern prioritizes the ability to move workloads between different cloud providers and relies on a redundant deployment of apps across multiple computing environments. The goal is to increase capacity, resiliency, or both.

Cloud analytics pattern

Enterprise architectures have transactional systems for daily operations and separate analytical systems for data analysis. Analytics systems obtain their data from transactional systems by either querying APIs or accessing databases. In most enterprises, analytics and transactional systems tend to be separate and loosely coupled. This pattern suggests running transactional and analytics workloads in two different computing environments. Although the separation, you can always feed data back to transactional systems when required.

Environment hybrid pattern

This is another pattern that can be used to begin your journey toward a multi-cloud architecture. It involves keeping a workload's production environment in an existing data center while utilizing the public cloud for development, testing, or other environments.  The significant advantages of this approach are that you can build familiarity and confidence in the clouds and related tools in your organization and that you can automatically start and stop the development and testing environments as needed (e.g., you can provision an entire environment for each commit or pull request, allow tests to run, and then turn it off again).

To summarize, your journey to multi-cloud comes with its own set of challenges:

• Complexity — Managing multiple cloud environments is not easy. It requires expertise and specialized tools.
• Security — Maintaining a consistent security posture across different clouds is a significant headache.
• Data Integration — Moving data between clouds can be a pain, and ensuring consistent data governance is critical.
• Cost Overruns — Multi-cloud can become a money pit if not carefully managed.

One option is to embrace the path of learning the technology and do it yourself during your multi-cloud migration, making it work for you. An alternative can be to hire talent with similar career experiences and learn with and from them. Another option is to bring in external experts who've been there and done that; they can guide you through the journey, help you avoid costly pitfalls, and be gone when the migration is over or when you have learned enough from them. 

I recommend teaming up with a technology partner specializing in multi-cloud solutions. They can handle the heavy lifting and let you focus on what you do best: your business.

Before You Dive In

Embarking on a multi-cloud journey is a bit like planning a cross-country road trip. You wouldn't just jump into the car and start driving. Here's what you need to do before hitting the multi-cloud highway:

1. 1. Know Your Systems (Maps) — Before you start your journey, take a good look under the hood. Understand how your existing systems work, their dependencies, and how they might (or might not) play nicely with different cloud providers. 
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3. Imagine trying to move your monolithic banking application, held together with digital duct tape and prayers, to a shiny new Kubernetes cluster. That's not going to end well; it’s better to refactor and modernize first, right?
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5. 2. Metrics (GPS) — Define clear metrics upfront to track your progress and measure the impact on your business. It's like setting a destination on your GPS – you need to know where you're going to know if you've arrived.
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7. Maybe you want to reduce infrastructure costs by 20%, improve application response times by 15%, or increase uptime to 99.99%. Whatever your goals, make sure you can measure them.
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9. A multi-cloud journey isn't just a tech project. It's a business transformation. That means your product and tech teams need to be in lockstep, like a well-choreographed dance routine (or at least a decent karaoke duet). This ensures that your multi-cloud strategy aligns with your product roadmap and delivers real value to your customers.

Imagine your product team dreaming up a revolutionary new AI-powered lending platform, but your tech team isn't prepared to support the massive computational requirements. That's a recipe for disappointment.

Do your homework, and make sure you're fully prepared before embarking on your multi-cloud adventure. The effort that goes into the alignment and analysis will be worth it when you're on your journey and roadblocks, changes in directions, and new ideas will arise. 

Take a moment to:

• Define Your Goals — What do you want to achieve with multi-cloud? Which are the key performance indicators that your journey is successful?
• Assess Your Infrastructure — Understand your existing systems and how they'll fit into a multi-cloud model.
• Choose the Right Providers — Evaluate their offerings and align them with your requirements. Assess their support and the expertise you can find on the market.
• Start Small — Pick a small challenge and a group of diverse team members to learn what challenges you’ll encounter (and plan for them).

Find Your Trusted Multi-Cloud Sherpa

Navigating the multi-cloud landscape doesn't have to be a solo adventure. Experienced tech partners like INSART can help you.

INSART's engineers are the MacGyvers of cloud integration, adept at weaving disparate cloud platforms and tools into a cohesive whole. They'll handle the complex configurations, data migrations, and security headaches so you can focus on what you do best: running your fintech business.

But it's not just about technical chops. INSART is also a trusted advisor, offering guidance on cost optimization, performance tuning, and even training your team to become multi-cloud ninjas. We are invested in your success, and we will be there every step of the way, ensuring your multi-cloud journey is smooth and efficient.

By working with INSART you can get help on critical areas such as:
Development of a Solid Strategy — Tailored to your specific business needs.

• Handling Complex Integration — They know the ins and outs of different cloud providers and can create seamless connections.
• Optimizing Security — Proactively identify and address vulnerabilities.
• Cost Control — Implement strategies to maximize ROI and avoid surprises.
• Training & Support — Empower your team with the knowledge to manage your multi-cloud environment effectively.

In Conclusion

The multi-cloud trend in fintech is here to stay. It offers exciting opportunities, but it's not without its challenges. By partnering with the right experts, you can unlock the full potential of multi-cloud and propel your fintech business to new heights.

With over 20 years of experience in software engineering and leadership, Giorgio is passionate about creating and delivering innovative, scalable, and accessible web, mobile, and embedded systems solutions.  As a seasoned engineering leader, Giorgio managed and mentored global and cross-functional teams in various domains, including fintech, payments, security, education, retail consumer industries, and browser development. 

Giorgio is also an international speaker, book author, and conference organizer who enjoys sharing knowledge and insights with the community. Giorgio is driven by a vision of a web that is safe, private, and equally accessible to everyone.