Looking for elasticity and scalability? Move to SaaS!

Jun 07, 2024 - 6 min read
Dani McNabb, Product Marketing Manager at Sopra Banking Software
  • The SaaS market is booming, expected to reach $282.2 billion in 2024, jumping to $374.5 billion by 2028.
  • AWS supports thousands of global firms, including fintechs and banks, with SBS choosing them as their technical partner. 
  • SBS works with AWS for myriad reasons, from scalability and elasticity capabilities to real-time data and analytics.
  • AWS’s benefits fall into four categories: efficiency and agility, innovation and speed to market, personalized experiences, and security and compliance at scale.
  • AWS’s solutions comply with varied regulations and keep sustainability firmly in mind, aiming to power operations using 100% renewable energy by 2025.
  • The debate no longer revolves around whether or when financial institutions should leverage the benefits of the public cloud, but how.

Revenue in the software as a service (SaaS) market is predicted to reach $282.2 billion in 2024, jumping to $374.5 billion by 2028. Amazon Web Services (AWS) is the leading cloud infrastructure player, offering infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), and of course, SaaS.

AWS’s platforms have myriad benefits, from lower upfront and ongoing costs to on-demand scalability and elasticity. Sopra Banking Software (SBS) and AWS began working together in 2017, providing cloud solutions to global financial services providers.

Their long-standing partnership has grown into a robust, technical one – discussed at last year’s Summit by Eric POGU, SVP of Cloud & SaaS Services at SBS, and Yves Eychenne, Senior Manager, Solutions Architect at AWS. We highlight some salient points talked about below.

Infographic: Revenue in the software as a service (SaaS) market is predicted to reach $282.2 billion in 2024, jumping to $374.5 billion by 2028 according to Statista.

History of AWS

Since launching in 2006, Amazon Web Services has supported countless industries. As part of that, they help financial services customers optimize operations and accelerate innovation while adapting to ever-changing regulations. To achieve that, they offer a broad set of services and partner solutions.

According to Yves Eychenne, “Thousands of firms from the fastest growing fintechs to systematically important financial institutions (FIs) are redefining their future on AWS.” 

SBS’s partner of choice

Sopra Banking Software backs that sentiment up, choosing AWS as their technical partner for the following reasons.

  • Pay-as-you-use model based on current requirements, reducing fixed costs.
  • High availability, scalability, elasticity, and data encryption capabilities.
  • Integration with other platforms using application programming interfaces (APIs).
  • Rapid deployment, automatic updates, accessibility, real-time data, and analytics.
  • Extensive AWS Regions and Availability Zones, with more planned.

An AWS Cloud Economic Study revealed organizations that move from an on-premise to a cloud solution realize a 69% reduction in downtime, 43% fewer security incidents per year, and 31% savings on infrastructure costs, enabled by elasticity.

AWS: transforming businesses

According to Yves Eychenne, “Every part of the industry from investment bankers and wealth managers to payment processors is using AWS to help transform their business, so they can stay competitive and profitable, attract talent, and grow.” The benefits tend to fall into all or some of the following four categories.

  1. Increased efficiency and agility.
  2. Accelerated innovation and speed to market.
  3. Delivering frictionless and personalized experiences.
  4. Enabling security and compliance at scale.

For example, Discover Financial Services decided to start migrating from a legacy mainframe and chose AWS “to support a scalable solution”. As a result, they “delivered security and enhanced the developer experience while increasing processing speed by 66% and reducing the time to adopt pricing changes”.

Furthermore, the Depository Trust and Clearing Corporation (DTCC) implemented a business continuity plan with AWS, achieving close to zero data loss and near-zero recovery time objectives.

Meanwhile, Sopra Banking Software has had a “fantastic response” to its partnership with AWS across Europe, per Eric POGU. They’ve emerged as the clear migration choice, with clients demonstrating strong confidence.

Eric POGU adds: “The financial services sector faces intense competition, significant regulatory oversight, and the need to maintain robust cybersecurity measures. AWS offers a multitude of services characterized by swift time to market on high-security protocols, empowering banks to rapidly innovate and introduce new products while upholding their commitment to ensuring security.”

By migrating to AWS, organizations have access to top-tier infrastructure services at a low investment cost – for example, they can quickly build secure and scalable virtual data centers.

Moreover, with the recent introduction of generative artificial intelligence (AI) and machine learning capabilities, banks can streamline processes through real-time processing and analytics. Indeed, in late 2023, NatWest announced they were expanding their collaboration with AWS, including their AI solutions.

Taking those factors into account, customers will be able to “go beyond their expectations in terms of the value they bring to the market, enhancing their competitiveness,” says Eric POGU.

By migrating to AWS, organizations have access to top-tier infrastructure services at a low investment cost. © Getty Images

Robust scalability and elasticity with SaaS

Alongside the benefits already mentioned, scalability and elasticity are fundamental. AWS offers the following.

  • Services that automatically procure or contract resources (scale in/out/up/down): Amazon S3, SQS, SNS, SES, and Aurora.
  • Services that integrate with AWS Auto Scaling: Amazon EC2, ECS, EKS, DynamoDB, and AWS Fargate.
  • Vast API library that facilitates product flexibility, improving the customer experience.

As Yves Eychenne says: “By migrating and modernizing IT workloads, financial services firms can operate in a more cost-effective, efficient, and agile environment. They can also retire technical debt, move expensive servers and databases to pay-per-use models, and relocate their people and resources from maintaining systems to higher business value initiatives.” 

For example, the Vanguard Group uses AWS and reaps the benefits from its elastic offering, reducing unit costs by 50%. Meanwhile, NatWest lowered carbon emissions for their machine learning platform by 75%, using an efficient, on-demand elastic architecture. 

Adhering to regulations

When picking a SaaS provider, adhering to regulations also plays a part. With that in mind, AWS complies with rules like the Payment Card Industry Data Security Standard (PCI DSS), System and Organization Controls (SOCs), and the International Organization for Standardization (ISO) guidelines. Additionally, AWS helps clients meet their environmental goals through their sustainability efforts, including:

  • Emissions monitoring and surveillance (EMS) solution that complies with ISO 14001.
  • Committed to reaching net-zero carbon emissions by 2040 and being water positive by 2030.
  • On track to power operations using 100% renewable energy by 2025 (five years ahead of their original 2030 target).
  • Average power usage effectiveness (PUE) of 1.2, compared to 1.84 for enterprise data centers.
  • Up to 3.6 times more energy efficient than surveyed US enterprise data centers, and up to five times more than typical EU enterprise infrastructure.

The debate no longer revolves around whether or when FIs should leverage the benefits of the public cloud, but how. Transitioning from on-premise to securely hosted managed services like AWS represents “a prudent and risk-free initial stride,” according to Eric POGU.

Yves Eychenne believes the financial services industry is being driven by factors like the growing availability of data. For example, embedded finance, open banking, buy now pay later, usage-based insurance, cryptocurrency payment and exchange, and robo-advisors are increasingly coming to the fore – trends that simply aren’t scalable without the cloud. 

As one of the key cloud infrastructure players, Amazon Web Services controls 31% of the sector, thanks to their scalable and elastic solutions. Indeed, SBS leverages them to power its Sopra Banking Platform and Sopra Financing Platform.

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