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Virtual Private Cloud Will Play a Critical Role in the Future of Banking

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Every industry evolves and changes as technology becomes more readily available. This is especially true in the financial sector. Technology has transformed how people conduct their banking business. A few decades ago, it was common for people to go to a bank to cash checks, discuss their finances with a banker, and get advice on investing.

As the cloud continues to drive Flexcube digital transformation and disrupt incumbents in every industry, we are seeing many leading institutions adopt cloud-first strategies. While the financial services industry is a natural adopter of cloud computing and new technologies, in some industries, there are still concerns about security, privacy, and compliance.

With rapid developments in information and communication technologies, the concept of cloud computing is gaining ground around the world. IT companies are doing their utmost to develop convenient cloud services that can give customers a new experience in their business. With the help of cloud computing, both banks and individuals can enjoy a wide range of benefits that will improve their performance. The Virtual Private Cloud will play a critical role in the future of banking.

In this post, we will explore how cloud technology is transforming the financial services industry and how it will revolutionize banking and finance.

What Is a Virtual Private Cloud?

A Virtual Private Cloud (VPC) is a cloud computing environment that is not only separated from other IT infrastructures but can also be created in a way that is isolated from any public network. A VPC can be accessed via a virtual private network (VPN) connection or other private networking services.

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Because a VPC can be set up without any physical or logical access to the Internet, it can also be considered a demilitarized zone (DMZ).

A VPC can be thought of as a self-contained network with full control over its network and subnetting structure. As a result, it is not dependent on external factors, such as the public Internet, which can be a significant benefit in terms of network reliability.

Benefits of virtual private cloud and cloud computing in banking

There are numerous benefits to be gained from implementing a VPC in a banking IT infrastructure. These benefits include:

Multi-tenant architecture: It is possible for a single VPC to house many virtual servers, each handling their own workload, without the need for these workloads to be aware of each other. This can significantly increase the density of an IT infrastructure, allowing for greater economies of scale.

Cost Efficiency: Virtualizing and deploying workloads in the cloud allows for significant cost-saving opportunities. VPCs can be centrally managed, leading to reduced operating costs in Oracle Flexcube universal banking.

Security: The widespread adoption of VPCs has led to increased security, especially for IT infrastructures with a global presence. VPCs allow for the deployment of virtual machines across multiple geographical locations, thereby mitigating internal threats.

Automation: The introduction of VPCs has led to the emergence of many automation tools that are capable of provisioning servers on a global scale in a matter of seconds. Automation tools allow for the deployment, configuration, management, and monitoring of VPCs across multiple geographical locations.

Business agility: VPCs allow banks to become globally scalable, thereby reducing the time to market and increasing the speed of business decision-making. The web-based nature of VPCs makes them easy to use, while the API-based nature of the tools developed around VPCs makes them easy to integrate with other banking systems.

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Flexible infrastructure: VPCs allow banks to have complete control over their infrastructure and allow them to have complete ownership over the resources and infrastructure required for their operations.

High reliability: VPCs ensure that banks have high levels of uptime. Cloud service providers are available in many geographic locations across the world. The ability to move to a different availability zone depending on where the IT resources are needed helps improve performance while also ensuring high levels of uptime.

So, How Is a Virtual Private Cloud Isolated on the Public Cloud Infrastructure of Banks?

The isolation of a VPC is provided by network security groups, elastic load balancers, and auto-scaling.

Network security groups grant access to resources, prevent communication with the Internet, and manage traffic between the VPC and the Internet and within the VPC. An existing network security group can have access to the VPC, but the security group must specifically permit inbound and outbound traffic to and from the VPC.

For banks, this means that the security group that protects the bank’s internal resources from intrusion can also protect the VPC. The security group can enable specific ports to accept inbound traffic from the VPC and send outbound traffic to the VPC.

Elastic load balancers provide a highly-available, flexible, and scalable solution for connecting resources in a VPC to the Internet. The load balancer receives traffic from the Internet and distributes it among the instances of an application.

Cloud Adoption in Banking Has Really Just Begun.

Cloud computing has the potential to transform the way banks conduct business. It will allow banks to develop and deploy new applications quickly and securely while improving their ability to deliver services to customers. Recognizing this opportunity, many banks are moving their applications to the cloud as a first step in the process, but most have many more steps to take to realize the full benefits of cloud computing.

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For the banks that are yet to begin their cloud journeys, the opportunity is vast. Our own experience with cloud customers worldwide indicates that the total cost of infrastructure ownership can be reduced by up to 30 percent within a year. In addition, the technology that enables the cloud should make IT faster and more agile, allowing for more responsive and more customized products and services.


Cloud computing will change the way banks do business, delivering more-flexible IT platforms, such as Oracle Flexcube 14.x that can speed innovation, improve product development, and enhance the delivery of services to customers. While moving to the cloud is a complex process, banks have the tools and the talent in place to begin their cloud journeys with confidence. Building this confidence, however, will take time and financial commitment, and there is no one-size-fits-all approach to the cloud.

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