Paving the way for sustainable financial services

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Martin Dube Rackspace Technology Headshot

By Martin Dube, Vice President, Public Cloud, Rackspace Technology

The financial services industry (FSI) plays a pivotal role in Australia’s economy, offering a wide range of services, from banking and insurance to asset management. However, this sector has often been associated with high energy consumption and significant environmental impact due, in large part, to investments in technology infrastructure and non-sustainable industries. As Australia grapples with the urgent need to address climate change, financial institutions are increasingly turning to innovative solutions to mitigate their environmental footprint. Cloud optimisation stands out as a promising avenue through which sustainability efforts can be advanced in this industry.

Financial services has long relied on immense amounts of data to facilitate operations. The energy consumption of the required data centres, often powered by fossil fuels, has raised serious environmental concerns. Cloud computing, by centralising these resources in large data centres, offers the Australian financial industry a more sustainable alternative. However, it is not enough to simply migrate to the cloud; optimisation is essential to maximise the sustainability benefits.

This optimisation includes a deeper focus on assessing environmental impact, social responsibility, and governance practices before investing in technological offerings. Key areas of emphasis within this trend include ESG risk assessment and management, ESG reporting and transparency, and the integration of ESG factors into investment decision-making processes to ensure a more holistic evaluation of investment opportunities.

Optimising to sustainability

Cloud providers invest heavily in making their data centres energy-efficient with the evolving focus on ESG principles in the financial sector. By embracing cloud services, Australian financial institutions can significantly reduce their energy consumption. This leads to a direct reduction in their carbon footprint, contributing to sustainability efforts.

This focus on sustainability expands to include additional business areas where the FSI can concentrate its efforts, particularly on ESG ethics. These areas include addressing concerns such as Anticompetitive Practices, Responsible Information Management, and Anri-corruption, which are integral to fostering a responsible and ethical business environment.

To effectively address these challenges, stakeholders in the FSI must continue focusing on ESG goals and metrics. It is essential to integrate these goals into the organisation’s overall strategy and operations. Establishing governance bodies, such as a small ESG Steering Committee, can drive the ESG strategy and progress. Moreover, gaining an integrated perspective on ESG requires involvement from various teams across the organisation, spanning functions such as sustainability, diversity and inclusion, human resources, security, ethics and privacy, and more.

As financial organisations optimise their workloads onto fewer servers, they reducethe overall number of servers required, reducing the energy needed to cool and power them. This approach not only results in cost savings and a lower environmental impact, further enforcing the sector’s commitment to sustainability.

By striking the right balance between public cloud, private cloud and on-prem solutions, financial services companies can minimise their footprint while saving money. This approach, supported by their commitment to ESG principles, highlights the sector’s dedication to sustainability while maintaining competitiveness.

Offloading hardware

Cloud optimisation also helps mitigate e-waste, a significant environmental concern. Hardware used for on-premises data centres often becomes obsolete quickly, leading to frequent equipment upgrades and disposal. In contrast, cloud providers bear the responsibility for managing and upgrading the hardware in their data centres, extending the lifecycle of equipment and reducing the environmental impact of e-waste.

Cloud optimisation can also contribute to sustainability through enhanced data security and compliance. Data breaches and legal penalties can result in significant reputational and financial damage but cloud providers invest heavily in security measures and compliance standards, reducing the risk of security incidents that could lead to financial and environmental damage.

Building resilience

By shifting to a cloud model, financial services providers can secure greater uptime of their services while having a reduced impact on the environment. Cloud optimisation enhances disaster recovery capabilities for financial institutions in Australia. In the event of a catastrophe, data and applications can be quickly restored from the cloud, reducing downtime and the environmental impact associated with data loss and recovery efforts.

Cloud optimisation is emerging as a powerful tool for advancing sustainability efforts in the financial services industry in Australia. By improving energy efficiency, reducing e-waste, and enhancing disaster recovery capabilities, cloud optimisation not only helps Australian financial institutions cut costs and improve operational efficiency but also contributes to a greener, more sustainable future.

As financial firms in Australia increasingly prioritise sustainability, the adoption of cloud optimisation will play a pivotal role in helping them achieve their environmental and corporate social responsibility goals while maintaining their competitive edge in the global marketplace.

 

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