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The benefits of hybrid cloud for financial institutions

Nastel Technologies®
October 11, 2021

Financial institutions and their service providers have traditionally owned and run their technology infrastructure on their own premises or in their own data centres. However, that’s changing with the advent of powerful public cloud services, such as Amazon Web Services, Google Cloud and Microsoft Azure.


As reported in the recent Ecosystems for success report, in the early years of cloud computing, many people believed financial institutions would be among the last adopters of the technology, due to security concerns. So, the speed and enthusiasm with which many financial institutions have begun using the cloud in recent years has come as a surprise.


The high rate of adoption is largely because financial institutions have realised they cannot achieve their complex IT and business objectives by hosting all their own infrastructure and applications. On-premise environments are, effectively, walled gardens that can inhibit fast, effective connectivity with other data centres – an essential requirement as customers have come to expect rapid interactions.


At the same time, financial services organisations recognise that moving entirely to the public cloud may not be the best solution either, at least in the short term.


They are discovering that the middle path of a hybrid cloud environment gives them the agility and access to services that cloud providers offer, while enabling them to maintain the high levels of security and regulatory compliance offered by on-premise infrastructure.


Hybrid cloud benefits

Hybrid cloud combines on-premise infrastructure with private and public cloud services, each of which has its benefits.


With on-premise infrastructure, computing, storage and applications are hosted in-house. Private cloud also gives organisations sole access to dedicated hardware and resources, but does so using virtual servers and on demand computing resources. Public cloud providers do much of the work for customers, managing their infrastructure, applications or other services, which organisations access via the public internet.


Hybrid cloud combines public and private cloud services from different third-party vendors to deliver IT infrastructure that is unified, flexible and cost-efficient. At the same time, organisations can maintain their core on-premise infrastructure, particularly for security integrity and/or for the high service demands of certain financial functions such as trading at low latencies.


The benefits of a hybrid cloud strategy for financial institutions include scalability, reduced costs, security and agility. From an IT point of view, harmonising on-premise infrastructure with private and public cloud services can help organisations to optimise the efficiency, productivity and performance of their technology operations.


Financial institutions have long consumed software and applications, deployed on-premise, inside their offices and data centre locations. As more and more service providers move to a public cloud model, a hybrid approach provides customers managing on-premise and private cloud environments the ability to connect to these service providers in the public cloud. The benefits of agility and scalability are then passed from providers to their customers via a more agile and contemporary service offering.



Connecting to the public cloud makes it easier for financial institutions to increase or reduce IT performance and functionality according to their needs.


They can scale up or down to meet changing demands by increasing or decreasing IT resources, adding or removing more machines to their architecture or adding more power to their existing setup.


This highly customisable environment enables organisations to allocate resources more efficiently and adapt quickly to volatile economic conditions.


Reduced costs

With hybrid cloud, financial institutions can house sensitive, business-critical data on in-house servers, while allowing less sensitive data and applications to move to the less costly public cloud.

This means they do not have to invest as heavily with on-premise infrastructure. As their need increases, they can easily scale up their cloud usage, only paying for the resources used.


Security and risk management

While reputable cloud providers have stringent security standards that evolve as new threats emerge, not all applications used by financial institutions are suitable for the public cloud.


Financial institutions may need to continue managing some applications and sensitive data in a private cloud or within their own data centre. This is possible in a hybrid cloud environment.


Hybrid cloud also enables financial institutions to spread risk widely. Effective risk management means avoiding having one’s eggs in a single basket. The stability and reliability of hybrid cloud creates a predictable environment in which to connect to financial markets, enabling better decision making.



The need to adapt quickly in response to internal and external changes is essential to the success of any financial institution.


By combining public cloud, private cloud and on-premise resources, organisations can balance scale, cost, control and power quickly to achieve the agility needed for competitive advantage.


With hybrid cloud, they can avoid abandoning legacy systems that support business-critical functions. These systems may represent major capital investment designed to support productivity over many years.


Instead, organisations can complement existing legacy systems with cloud services, shifting components of user interface and data processing to a more efficient environment as required.


Implementing a hybrid cloud strategy with ASX

ASX understands financial markets and the regulatory landscape and has designed its connectivity offering based on the specific needs of the financial services industry. ASX Connectivity Services is uniquely attuned to client needs, with the provision of equal length cross-connects, flexible network services to meet varying connectivity requirements, market-aligned maintenance schedules, points of presence in global financial market hubs, and much more.

As a trusted market operator, ASX understands the regulatory environment in which our clients operate, and has insight into and can respond to compliance requirements and developments as they occur.


With decades of experience building and operating critical financial markets infrastructure, ASX are uniquely placed to understand how a hybrid cloud environment needs to work for financial institutions. We know, through experience, that public cloud, private cloud and on-premise infrastructure should not compete but should, instead, work in harmony.


That is why we offer our on-premise data centre at the Australian Liquidity Centre (ALC) for private cloud connectivity and access to the public cloud through ASX Net and ASX Net Global.


ASX has developed a range of products and services built on world class infrastructure that enables seamless connectivity between customers’ on-premise, private cloud and public cloud environments. This has helped to reduce total cost of ownership, simplified design and rapidly accelerated delivery times.


In addition, ASX understands the increasing need to link hybrid clouds to service providers, each with varying delivery models. ASX has designed these products and services to provide high-performance, reliable and secure connectivity to an increasing number of service providers both in the Australian Liquidity Centre and over the ASX Net ecosystem.


Australian Liquidity Centre

The ALC is Australia’s only data centre designed specifically for financial institutions. It is an exchange colocation facility that enables financial institutions to build private or hybrid cloud capabilities.


It supports the management of infrastructure and applications in a secure environment, with the flexibility of cloud access. A number of leading financial institutions have built private cloud environments in the ALC with their service providers who are also colocated with us. The ALC provides a number of avenues for financial market participants to meet their technology and business requirements. Some of these include purpose-built turn-key data centre hosting services, bespoke private cage areas and high-density compute capabilities.



ASX Net connects financial institutions to the public cloud, outside the ALC, enabling access to preferred cloud service providers.


As part of the ASX Net suite of services, ASX CloudConnect is uniquely designed for financial markets businesses, providing seamless, dedicated connectivity with public cloud service providers, including Amazon Web Services, Microsoft Azure, Google Cloud Platform and others upon request.


ASX CloudConnect is an end-to-end service that is multi-cloud compatible and ideal for demanding applications such as storage, disaster recovery, data-rich apps and hosted trading platforms. It provides secure, reliable, high-performance connections that are fully monitored and managed. Our direct cloud connections provide extremely low latency with diversity for maximum redundancy.


Implemented in days, not weeks, ASX CloudConnect is tailored for financial institutions, with scalable bandwidth options and competitive pricing.


Whether linking your own on-premise and private cloud to your public cloud environment, or to your service provider’s public cloud offering, ASX CloudConnect can meet your hybrid cloud needs.


The majority of generic telecommunications providers that offer connectivity solutions for public and private cloud lack specialist financial services knowledge and offer a one-size-fits-all approach. In contrast, ASX’s connectivity offering is built specifically for the financial industry and our network specialists have proven experience and expertise in financial markets. These experts set up and manage secure, resilient and cost-effective cloud connectivity services used by hundreds of financial institutions.


This article originally appeared on, to read the full article, click here.

Nastel Technologies is the global leader in Integration Infrastructure Management (i2M). It helps companies achieve flawless delivery of digital services powered by integration infrastructure by delivering tools for Middleware Management, Monitoring, Tracking, and Analytics to detect anomalies, accelerate decisions, and enable customers to constantly innovate, to answer business-centric questions, and provide actionable guidance for decision-makers. It is particularly focused on IBM MQ, Apache Kafka, Solace, TIBCO EMS, ACE/IIB and also supports RabbitMQ, ActiveMQ, Blockchain, IOT, DataPower, MFT, IBM Cloud Pak for Integration and many more.


The Nastel i2M Platform provides:


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