Drafting a mainframe hybrid cloud for banking roadmap? Start with “Why?”

Mar 8, 2023 by Duncan Alexander



In brief

  • Hybrid cloud solutions offer banks the flexibility to leverage the benefits of both public and private clouds, concealing complexity and allowing them to react faster to market threats and opportunities 
  • This can be used to drive new features such as providing customers with a 360-degree view across their deposit, saving and investment accounts 
  • Speed, agility and simplification offer the flexibility to strengthen user engagement and make the hybrid cloud journey worth the transition 


Year after year, financial institutions hemorrhage money, maintaining slow, dated and patched-up systems, throwing good money after bad. Unsurprisingly, change is the order of the day, and banks must go back to basics — back to the future, so to speak.

But why should colleagues, management and stakeholders interrupt mission-critical plans and busy schedules to accommodate a utopian notion of security, flexibility and resilience via a mainframe hybrid cloud model?

What can be gained from, what appears to be, a giant transitional leap of faith? How on earth are the team hoping to pull it off in reality — lift and shift, refactoring, rewriting? Also, sorting the technical aspects is one thing, but how are you going to establish and promote a hybrid cloud culture? And what about motivating the workforce, transferring workloads or embedding the practicalities of hybrid cloud working? Left to their own devices, doubters find their voices. So, how will you bring people along with you?


Hybrid cloud benefits


Answers to these (and many more) questions will provide the bedrock for your road to cloud in banking success. Here are just some of the business benefits of hybrid cloud adoption you’ll enjoy:

  • Better business agility: Fail fast, learn faster
  • Extra scalability: Dial storage infrastructure up and down at will. Avoid vendor lock-in and only pay for what you use
  • Sharper productivity: Upgraded operational efficiency and lower costs. User-friendly dashboards
  • Advanced analytics: Real-time predictive analytics enables personalized customer delivery
  • More engaging user experience: Clearer customer communication
  • Enhanced business continuity: Less downtime
  • Smaller infrastructural footprint: Greater cost-efficiency
  • Greater access to locked-in funds: Shift from CapEx to OpEx
  • Deeper partner relationships: More productive collaboration


Unlock greater business value


Modernization takes care of the legacy maintenance chasm in the annual IT budget, freeing-up financial and human resources for more constructive and forward-looking projects. It enables you to meet critical business challenges like compliance and competition head-on. And elevating systems and operations helps cope with ever-increasing regulatory requirements, risk management considerations and transparency issues. Many of today’s capabilities, like real-time access and cloud-based solutions, either limp along or won’t run at all on outmoded systems.

Mainframe hybrid cloud for banking coupled with a passion for hyper-personalization brings essential services like providing customers with a 360-degree view across their deposit, saving and investment accounts, within reach. Together, they deliver the speed and flexibility required to strengthen user engagement. And speed, agility and simplification are vital characteristics in extreme markets because the more time it takes to process data from multiple sources, the more the bank is exposed to unnecessary risk.


Become even more Agile


Hybrid cloud enablement conceals complexity and allows banks to react faster to market threats and opportunities. It also improves communication and collaboration, getting the most out of best practices like Agile methodology or Shewhart’s simple but powerful plan-do-check-act (PDCA) cycle. Complementary models like these are the principal building blocks of enhanced profitability:

  • Agile: Objectives and key results (OKRs) are vital Agile ROI measurements. They allow you to embed transparency and accountability throughout the organization by continually monitoring tasks and making micro-adjustments. Coupled with technological modernization, sharper agility cuts time-to-market and provides management with real-time data. Agile also benefits investors — accustomed to watching paint dry while waiting for the bank’s annual report — who can now access performance metrics on a more timely basis
  • PDCA: An integral part of lean management, the iterative, waste-paring PDCA process tests, analyzes and improves solutions


Safeguard your sensitive data


Hogan has been serving the banking sector for more than 4 decades. Over 40 banks and card processors use Hogan as their primary core banking application. Today that means processing over $5 trillion in deposits, which makes it one of the largest core banking systems in the world.

Unsurprisingly, the Hogan-powered, mainframe hybrid cloud model is a popular choice for banks. Adoption allows organizations to secure sensitive data in a fully customizable private cloud infrastructure and move less-sensitive assets to one or more highly versatile, low-cost public cloud resources.

That said, a robust governance and security strategy must still be conceived and implemented consistently across public and private clouds. In addition, applying DevOps best practices reduces vulnerability, maximizing automated benefits and operational efficiency.

Cloud migration has risen to the top of banking boardroom agendas as decision-makers have become more convinced of its tech and business benefits.


Make your bank more resilient


Luxoft is a trusted provider of change, modernization and operational services for banking and capital markets. By partnering with market-leading tech companies, Luxoft expands its ecosystem of innovative services, technologies and talent, enhancing customer relationship management and empowering clients to achieve better business outcomes.

We regard cloud migration and progressive, mainframe-based, core-application modernization as two sides of the same transformational coin. Luxoft develops and invests in talented people who keep the on-premise infrastructure operationally resilient, maintaining the core and innovating around it. Our experts possess the right skills and experience in Hogan core banking applications to take control and modernize this vital part of client architecture.


Join the cloud revolution


More than 80% of decision-makers surveyed by the American Bankers Association (ABA) said they were in the cloud adoption (or early adoption) stage, with just 5% claiming to be mature users. Of those banks, no more than 30% had a formal cloud strategy, and less than 25% had appointed a cloud-specific leader or similar. Most replied that increased cloud usage would enhance the customer experience. However, almost 60% said cloud spending would be under $250k in the coming year. So, there’s still work to do.




To learn more about how mainframe hybrid cloud works in practice, and what Luxoft’s cloud innovation and unrivaled domain knowledge can do for your bank, visit luxoft.com/industries/banking/hogan-hybrid-cloud-solution or contact us.


Duncan Alexander , Product Director – Core Banking

Duncan Alexander author linkedin

Product Director – Core Banking

Duncan leads several existing and new core banking products and services within Luxoft’s Global Banking Division. He has over 3 decades’ experience in the application of business technology to achieve strategic goals across multiple industries, including banking, insurance, retail, travel and logistics. Duncan has provided strategic advisory services and delivered mission-critical systems as a strategic partner to clients and held senior positions within several large enterprises. His main area of focus is the realization of business benefits for our clients from digital transformation.