Building for scale: How flexible cloud infrastructure enables wholesale banking growth
JUN. 4, 2025
2 Min Read
Wholesale banks are unleashing growth by replacing rigid on-premise systems with flexible, hybrid cloud infrastructure that scales effortlessly, cuts costs, and meets global compliance demands for seamless international expansion.
Wholesale banks that embrace flexible, scalable cloud infrastructure can supercharge global growth – quickly entering new markets, cutting IT costs, and ensuring rock-solid compliance and resilience.
As wholesale banks expand into new markets, new asset classes, and digital-first services, their IT backbone must scale seamlessly with demand. However, many banks remain saddled with rigid on-premise systems and aging legacy architectures that struggle to keep up. The result is skyrocketing costs, operational inefficiencies, and technology bottlenecks that stifle expansion. A hybrid cloud strategy built on containerized applications, microservices, and automated DevOps pipelines helps banks gain the agility to rapidly scale operations, optimize costs, and maintain resilience across jurisdictions. This approach – especially when designed to be vendor-agnostic – enables seamless global expansion without compromising security or compliance.
Key takeaways
- 1. Rigid on-prem systems block wholesale banking expansion
- 2. A hybrid cloud approach boosts scalability and cost efficiency
- 3. Vendor-agnostic architectures protect resilience and compliance
- 4. A roadmap to seamless expansion across international markets
- 5. Common questions about wholesale banking
Rigid on-prem systems block wholesale banking expansion
Legacy core banking systems and on-premises data centers have long been the foundation of wholesale banks, but they now often act as a handbrake on growth. These rigid environments can’t easily scale to support new market entry or surges in digital transaction volumes. They require significant capital expenditure and lead time to expand – for example, provisioning a new data center or upgrading core systems for higher capacity might take months and millions. Meanwhile, business opportunities in new regions or product lines can slip away if IT can’t keep up.
Fixed on-prem infrastructure carries heavy ongoing costs and inefficiencies. 75% of banks’ IT budgets are spent just “keeping the lights on” maintaining legacy systems, leaving only a fraction for innovation or expansion initiatives. Such cost structures are unsustainable when trying to enter new markets or launch digital services – every dollar tied up in outdated tech is a dollar not invested in growth. Moreover, scaling up capacity on-prem often means over-provisioning (buying servers for peak load that sit idle most of the time) or risking performance issues during demand spikes. Neither is tenable for a bank looking to grow rapidly.
Rigid systems also slow down time-to-market. Standing up new environments for a product or region can require lengthy procurement, installation, and testing cycles in an on-prem world. For a wholesale bank, this might mean it takes 6-12 months to roll out a new trading platform in a different country, by which time, agile fintech competitors or local banks have seized the opportunity. Legacy architectures, with tightly coupled modules and manual workflows, make it hard to add new features or integrations quickly. The result is frustrated business teams and missed revenue opportunities.
- Limited agility: Traditional one-size-fits-all IT stacks can’t easily adapt to unique local requirements or fast-changing customer demands. Every customization is a heavy lift.
- Scalability issues: Capacity upgrades require physical infrastructure changes, causing delays and potential downtime. Scaling horizontally into new regions means duplicating expensive setups.
- Compliance challenges: On-prem systems in one country may not meet regulatory needs in another. Banks often must maintain separate siloed systems per region, adding complexity and cost.
Ultimately, clinging to rigid on-premises environments puts wholesale banks at a competitive disadvantage. It forces a trade-off between growth and stability: expanding services strains the legacy infrastructure, yet reinforcing that infrastructure drains resources that could fuel expansion. This catch-22 leaves CIOs and CTOs in a tough spot. To break out of this trap, it’s clear that a different, more flexible infrastructure approach is needed – one that can scale as fast as the business requires, without blowing up the budget or risking outages.
A hybrid cloud approach boosts scalability and cost efficiency
Enter hybrid cloud – a strategy that blends private clouds and on-prem systems with public cloud resources. For wholesale banks, a hybrid cloud architecture offers the best of both worlds: the elasticity and services of public cloud to handle spikes and new workloads, plus the control of private infrastructure for sensitive data and latency-critical operations. The result is a dramatically more scalable and cost-efficient IT environment, purpose-built for growth.
With hybrid cloud, banks can dynamically allocate workloads to where it makes the most sense. For instance, a bank can keep core payment processing on a private cloud or on-prem for low latency, but burst to public cloud for end-of-quarter risk calculations or heavy report processing. If a new trade finance platform suddenly sees transaction volumes double, the bank can instantly spin up additional cloud servers to handle it – no need to wait weeks for new hardware. This elasticity means no more turning away business due to capacity limits. Systems scale up (or down) automatically with demand, ensuring consistent performance for customers and traders even during extreme market events.
Hybrid cloud’s pay-as-you-go model significantly lowers the total cost of ownership. Rather than massive upfront investments in data centers that may sit underutilized, banks pay only for the compute and storage they actually use in the cloud. This efficiency translates directly to the bottom line – studies by Gartner have found hybrid cloud deployments can reduce infrastructure and IT costs by up to 30% compared to on-premises only setups. In practice, wholesale banks can reallocate those savings into developing new products or expanding into new regions. Additionally, cloud providers’ economies of scale mean certain workloads (like data analytics or AI) can be run far more cheaply in the cloud than in-house. Over time, moving the right workloads to cloud infrastructure bends the cost curve downward even as the business grows.
Embracing hybrid cloud goes hand-in-hand with modern application design and DevOps automation. By refactoring monolithic applications into microservices and packaging them in containers, banks achieve portability – these services can run on-prem or on any cloud seamlessly. Development teams can build new features without being tightly coupled to legacy release cycles. Automated CI/CD pipelines then deploy these containerized apps to whichever environment is needed at the click of a button. The net effect is that launching a new service (say, an API for institutional clients or a mobile app for corporate treasury) becomes dramatically faster and more iterative. What used to take months to procure servers and set up environments now takes days or hours in the cloud. This agility allows wholesale banks to respond to market opportunities in real time – whether it’s rolling out a new financing product ahead of a competitor or quickly extending services to a new country’s customer base.
Hybrid cloud in action:
- Scalability without limits: Use virtually infinite cloud resources to handle peak workloads or expansion, instead of being capped by fixed data center capacity.
- Higher resiliency: Run active-active setups across on-prem and cloud, so one can back up the other for continuity. No single point of failure.
- Optimized workload placement: Match each workload to its ideal environment (keep sensitive, low-latency tasks on private infrastructure; move elastic, less sensitive tasks to public cloud), achieving performance goals at lower cost.
- Lower TCO: By rightsizing resources and eliminating over-provisioning, hybrid cloud strategies often save banks tens of millions in infrastructure costs over a few years. (Many financial institutions report ~40% TCO savings after cloud migration.)
- Developer productivity: Cloud-native platforms and DevOps toolchains enable faster development cycles, so IT can deliver the features that drive revenue growth more quickly and reliably.
For CIOs and CTOs, these benefits translate into measurable business outcomes – from reduced cost-income ratios to faster customer acquisition in new markets due to speedy IT rollout. Importantly, hybrid cloud doesn’t mean throwing away all on-prem systems overnight; it allows a gradual modernization. Critical legacy systems can be incrementally modernized or integrated via APIs, while new capabilities are built cloud-first. This balanced approach lets banks innovate rapidly at the edge (in the cloud) while steadily refactoring the core. The end goal is an IT landscape that scales effortlessly as the bank grows, rather than acting as the growth limiter.
Vendor-agnostic architectures protect resilience and compliance
Moving to the cloud at scale introduces a new consideration for wholesale banks: vendor lock-in. Many cloud solutions – especially if approached haphazardly – can end up tying a bank’s fate to a single provider’s ecosystem. This is risky. Outages, pricing changes, or compliance gaps at one cloud vendor can severely impact a bank that has all its eggs in that basket. Furthermore, regulators in some jurisdictions express concern about banks becoming overly dependent on a handful of large cloud providers (concentration risk). The answer is to design a vendor-agnostic, multi-cloud architecture from day one.
Vendor-neutral design unlocks flexibility
Traditional IT service firms often push a one-size-fits-all cloud migration, lifting a bank onto a single preferred cloud platform. It may simplify things initially, but it sacrifices flexibility. If that platform doesn’t offer a feature needed for a new product, or doesn’t have a data center in a country the bank wants to enter, expansion plans hit a wall. And junior implementation teams may unknowingly hard-code dependencies into a bank’s applications that make switching clouds or adding another cloud later extremely difficult. In contrast, a vendor-neutral approach keeps a bank’s options open. This means using open standards, container orchestration (like Kubernetes), and cloud-agnostic tooling that can run on any major cloud or on-prem environment. Applications are abstracted from the underlying infrastructure, so they’re portable. The bank can mix and match providers – for example, using AWS in North America, Azure in Europe, and a private cloud for certain proprietary systems – all unified under a single management and monitoring framework.
Multi-cloud strategies improve uptime and pricing leverage
A vendor-agnostic strategy directly boosts resilience and uptime. With workloads distributed across multiple clouds or able to move between them, an outage at one provider won’t bring operations to a halt. For instance, if Cloud X has a region-wide outage, the bank’s Kubernetes platform can automatically shift customer-facing workloads to Cloud Y or to its private cloud cluster. This kind of multi-cloud failover capability ensures uninterrupted service for clients, which is critical in wholesale banking where transaction volumes are high and downtime can cost millions per minute. Additionally, multi-cloud architectures allow competitive procurement – the bank can avoid being price-gouged by one vendor by shifting workloads if needed. The flexibility to “vote with your feet” keeps cloud providers honest and service levels high.
Cloud flexibility supports regulatory compliance across markets
Perhaps most importantly, a vendor-agnostic approach helps maintain compliance in every market the bank operates. Different countries have varying data sovereignty laws and regulations (GDPR in Europe, data localization rules in APAC, etc.). By not being tied to a single cloud vendor, banks can choose the best solution to meet each locale’s requirements. For example, if a certain country requires customer data to reside in-country, the bank could deploy a local private cloud or use a regional cloud provider for that data, while keeping less sensitive functions on a global public cloud. This flexibility to deploy workloads in the optimal location makes it much easier to adhere to regulatory demands. 91% of organizations say that using cloud has made it easier to meet government compliance requirements - a testament to how modern cloud frameworks (when done right) can improve the compliance posture. Features like automated compliance monitoring and encryption services from cloud providers, used in a multi-cloud setup, can strengthen overall governance. The key is not relying blindly on any single provider’s compliance assurances, but rather architecting an independent layer of security and compliance controls across your cloud environments.
Strategic architecture is key to avoiding future lock-in
Lumenalta’s experience shows that achieving true vendor agnosticism requires senior architectural foresight. It’s about designing the foundation such that applications and data are portable and governance is centralized, from the start. Our senior cloud architects embed principles like infrastructure-as-code (to replicate environments consistently on different platforms) and federated identity management (so users have unified access control across clouds). This ensures the bank retains ultimate control over its IT destiny, rather than being dictated by a vendor’s roadmap.
In contrast, less experienced teams may inadvertently bake in proprietary services (for example, using a database that only one cloud offers) that later limit flexibility. By insisting on open, interoperable solutions at every layer – from databases and middleware to deployment pipelines – banks can future-proof their architecture. They gain the freedom to scale into any region, swap out technologies as better options emerge, and maintain resilience even if one vendor runs into an issue. The payoff is an IT environment that is both agile and governed, innovative and compliant – a duality that wholesale banks absolutely require as they grow globally.
A roadmap to seamless expansion across international markets
Transforming a legacy banking IT environment into a scalable, cloud-powered platform doesn’t happen overnight. It requires a clear roadmap and execution in phases, but the end result is an infrastructure that paves the way for expansion rather than impeding it.
Below is a high-level roadmap CIOs and CTOs can follow to enable seamless growth across borders and business lines:
1. Assess and prioritize legacy modernization: Begin with a thorough audit of existing systems and their limitations. Identify which legacy applications are bottlenecks to scale or expansion – for example, a monolithic lending system that can’t support new product launches, or an on-prem treasury app that doesn’t meet another country’s regs. Prioritize these for modernization or replacement. Develop a business case focusing on outcomes (e.g., faster time-to-market, cost savings) to secure buy-in. Often, starting with a pilot migration of a non-critical workload to a hybrid cloud can demonstrate quick wins and build confidence.
2. Embrace containerization and microservices: Initiate refactoring of key applications into microservices and containerize them. This makes your applications cloud-ready and portable. Set up a container orchestration platform (Kubernetes) that spans on-prem and cloud environments, forming the backbone of your hybrid cloud. The goal is to ensure any new service is built cloud-native, and over time, to carve off pieces of legacy systems into microservices. This step drastically improves flexibility – the same service could be deployed in a U.S. cloud region or an Asian private cloud with equal ease, supporting global rollout.
3. Implement a hybrid cloud foundation: Next, establish connectivity between your data centers and cloud providers (secure VPNs, dedicated links, etc.), and deploy a hybrid cloud management layer. Migrate suitable workloads to the cloud – starting with those that will immediately benefit from elasticity (e.g., analytics, dev/test environments, customer-facing digital channels). Introduce infrastructure as code and CI/CD pipelines to automate environment setup and software releases across all platforms. This foundation phase often yields early benefits: for instance, one bank moved its risk modeling to a cloud-based cluster and cut processing time from 6 hours to 1, enabling more frequent insights. These kinds of improvements build momentum for broader cloud adoption.
4. Leverage multi-cloud strategically: As you extend services to new markets, decide on the optimal cloud or infrastructure for each case. Maybe use Azure for regions where it has a strong presence, AWS for certain analytics services, or a local cloud for a country with strict data laws. Design architecture for each new deployment to be multi-cloud by default, with redundancy across at least two platforms for critical services. Establish unified monitoring, security incident management, and compliance reporting across all environments – so even though you’re using multiple clouds, it operates like one cohesive infrastructure from your perspective. This multi-cloud approach ensures maximum uptime and local compliance, turning IT into an enabler for entering any market the business targets.
5. Optimize and iterate with expert partners: Finally, continuously refine your cloud architecture with lessons learned. Encourage teams to iterate on automation, cost tuning, and resilience testing (e.g., simulate a cloud outage to ensure failovers work). Given the complexity of wholesale banking operations, engage experienced cloud architects (like Lumenalta’s senior team) to guide this journey. Having seasoned experts who have solved similar challenges can accelerate progress and preempt pitfalls – for example, avoiding a compliance misstep or an integration snag that could delay a market launch. Their guidance is especially valuable in navigating regulatory approvals for cloud usage in various jurisdictions and in instituting best practices for security and governance at scale. Remember, the goal is not just to migrate to the cloud, but to fundamentally transform IT into a scalable, service-oriented model that directly supports the bank’s growth strategy.
By following this roadmap, wholesale banks can turn their IT infrastructure into a springboard for expansion. The results speak for themselves: institutions that have fully embraced such cloud-first modernization have cut transformation times and IT costs significantly, all while achieving their target business outcomes. In practical terms, that could mean entering a new country’s market in months instead of years, or onboarding a wave of new clients without needing to double the IT team or budget. The business impact is huge – faster innovation, lower operating costs, and the ability to scale at will.
In the end, building for scale is about making sure technology no longer constrains the ambitions of a wholesale bank. With a flexible, hybrid, and vendor-agnostic cloud infrastructure in place, CIOs and CTOs can say “yes” to bold expansion plans knowing the backend will support it. Whether it’s rolling out a new digital trading platform across continents or rapidly complying with unexpected regulatory changes, the bank’s IT is ready and adaptable. Lumenalta’s cloud experts champion this tailored approach – rather than a one-size-fits-all solution, we design cloud architectures that fit the unique needs of each financial institution. The payoff is a platform engineered for resilience, security, and efficiency ata global scale. Wholesale banks that get this right will be positioned to lead in the next era of global banking growth, powered by an IT infrastructure that’s as agile and far-reaching as their vision.
Lumenalta is a leading cloud transformation partner specializing in the financial services sector. Our senior cloud architects design scalable, vendor-agnostic hybrid cloud infrastructures that enable wholesale banks to expand rapidly while maintaining world-class resilience, security, and compliance. We bring deep expertise and a collaborative approach to help traditional banking IT evolve into a modern, agile powerhouse that drives business growth.
Common questions about wholesale banking
What is hybrid cloud in wholesale banking?
How does a hybrid cloud strategy help wholesale banks scale globally?
How do vendor-agnostic cloud architectures benefit banks?
How can banks ensure regulatory compliance when using cloud services?
What are the first steps to modernize legacy systems for cloud readiness in banking?
Discover how your bank can cut costs with hybrid cloud.
