Modern Infrastructure for Operational Resilience in Financial Services

Today's financial institutions face extraordinary challenges, including maintaining strict regulatory compliance while driving innovation, securing sensitive data against increasingly sophisticated threats, and meeting customer expectations for seamless digital experiences. For CIOs and CISOs in the banking, financial services and insurance (BFSI) sector, building truly resilient infrastructure has become a strategic imperative.

This complexity is reflected in the technology landscape. The 2025 State of Cloud Report reveals that 48% of organizations say hybrid cloud for multi-environment deployment is critical to their IT operations. For financial services specifically, this approach offers distinct advantages in creating infrastructure that delivers both regulatory compliance and the foundation for AI-driven transformation.

How hybrid cloud powers legacy modernization

Hybrid cloud provides BFSI organizations with the flexibility to properly place workloads based on their unique requirements, including:

• Regulated workloads: Private cloud environments for tightly controlled data that is subject to banking regulations.
• Customer-facing applications: Public cloud infrastructure for scalability during peak usage.
• Core: Often kept on-premises or in private cloud environments due to their legacy architecture.
• Data analytics and AI initiatives: Distributed across environments based on data sensitivity and compute needs.

Legacy system modernization: A critical challenge

For many banks, their core services remain on-premises for a simple reason: they are legacy platforms. The imperative to modernize these systems while maintaining business continuity creates significant challenges.

Financial enterprises face several obstacles in this modernization journey, including:

• Data volumes and complexity: Financial institutions handle massive amounts of transaction records, customer information and market data. Managing and securing this diverse and complex data can be time-consuming.
• Regulatory compliance: The financial sector is subject to numerous regulations requiring stringent data protection measures.
• Integration complexity: Connecting modern cloud systems with legacy infrastructure is challenging and requires careful planning and execution.

Building a foundation for operational resilience

Operational resilience in financial services depends on modern infrastructure that can withstand and rapidly recover from disruptions. This requires several key capabilities, including the following.

Immutable backup and rapid recovery

Modern data protection is essential for financial institutions to maintain business continuity. Cohesity, one of the partners of Rackspace, provides critical capabilities in this area.

“Financial institutions face a unique modernization challenge,” says David Bedjanic, Director, MSP AMERICAS at Cohesity. “They must transform legacy infrastructure while maintaining the highest levels of data protection and compliance. Our unified data management platform bridges this gap by providing immutable backups and rapid recovery capabilities across hybrid environments. This protection fabric enables banks to confidently pursue infrastructure modernization while ensuring their most sensitive data remains secure and compliant, regardless of where workloads reside."

Immutable backups prevent unauthorized changes or data deletion, helping to ensure data integrity and compliance. This capability is particularly crucial for financial institutions facing ransomware threats.

Secure connectivity across environments

For financial institutions operating across multiple environments, secure connectivity is paramount. Secure private networks provided by RackConnect® Global address this need by seamlessly integrating public cloud services with dedicated private cloud environments.

This approach offers significant cost benefits as well. Rackspace research indicates financial institutions can reduce IT spend, including up to an 80% reduction in egress costs, by implementing properly designed hybrid cloud environments.

Comprehensive data protection strategy

Financial data requires multi-layered protection. A robust strategy includes:

• Data classification: Machine learning-based classification of sensitive information
• Cyber vaulting: Air-gapped storage of critical data
• AI-powered threat detection: Proactive identification of potential security breaches
• Governance frameworks: Comprehensive policies ensuring regulatory compliance

Workload-specific analysis and placement

Cloud leaders are particularly effective at analyzing where specific workloads should reside. The State of the Cloud Report shows that 54% of cloud leaders have implemented a comprehensive workload-by-workload analysis system, compared to just 38% of other decision-makers.

For financial services, this means that it is vital to carefully evaluate each application and data set to determine its optimal environment based on:

• Security and compliance requirements
• Performance needs
• Cost considerations
• Integration with other systems

Enabling AI innovation while maintaining compliance

Financial institutions are increasingly looking to AI to drive innovation while dealing with stringent compliance requirements. The State of Cloud Report found that 84% of organizations now use AI as part of their cloud strategy.

In the financial sector, AI integration is focused on several key use cases, including:

• Fraud detection and prevention (40% of financial services institutions)
• Algorithmic investment strategies
• Risk assessment
• Customer experience personalization

However, AI initiatives require robust infrastructure that can handle the intensive compute demands while maintaining strict data governance. A hybrid approach allows institutions to:

1. Keep sensitive training data in controlled environments.
2. Scale compute resources dynamically when needed.
3. Apply consistent security policies across environments.
4. Maintain regulatory compliance while pursuing innovation.

The talent challenge

One significant hurdle for financial institutions is the shortage of skilled cloud professionals. The State of Cloud Report shows that 40% of organizations cite the lack of skilled cloud professionals as a constraint on effective cloud management.

This talent gap is particularly acute for financial services companies dealing with complex regulatory environments and legacy systems. Working with experienced partners who understand both the technology landscape and the specific needs of financial institutions can help bridge this gap.

“Cloud environments are constantly evolving, and emerging technologies demand specialized expertise in areas like containerization, microservices adoption, and hybrid cloud security and observability,” says Bryan Litchford, VP, Product and Engineering at Rackspace.

“Financial institutions must balance traditional tech stacks with investments in modernization and innovation to stay competitive. With the right combination of internal talent and trusted partners, they can accelerate transformation while maintaining the stability and operational resilience required by regulators.”

Looking forward: The resilient financial enterprise

For financial sector CIOs and CISOs, building resilient infrastructure requires a thoughtful approach that balances security, compliance and innovation. Well-deployed and managed hybrid cloud environments can deliver the foundation to support both operational resilience and forward-looking initiatives.

By leveraging solutions like hybrid cloud offerings from Rackspace and data protection capabilities from Cohesity, financial institutions can create an infrastructure that withstands today's challenges while positioning them for tomorrow's opportunities. This approach ensures that banks can continue to serve their customers with minimal disruption while pursuing the innovations that will define the future of financial services.

To discuss your cloud solutions, contact us to speak to one of our experts today. 

This article was produced by Rackspace with insights from Cohesity, a leading provider of modern data security and management solutions for the financial services industry. Click here to learn more about Cohesity.