Powering Financial Services Decision-Making with Bare Metal Infrastructure

Key takeaways

• Community banks and credit unions often lack the infrastructure they need to turn transactional data into actionable insights.
• For analytics, bare metal infrastructure provides better performance, more predictable costs, and tighter control of data than shared cloud environments.  
• Teams can easily build an analytics dashboard on top of bare metal infrastructure to deliver insights in time for analysts to act on them. 

Many community banks and credit unions have amassed years of transactional data. They’ve retained credit card settlement records, fraud detection information, and certificate of deposit (CD) leads matched to account holder profiles. The problem is that these financial institutions often lack the technology infrastructure to transform all this data into actionable insights.  

Shared cloud services are not the answer. While cloud services might provide fast access to infrastructure, fluctuating cloud costs complicate budgeting. Meanwhile, the lack of visibility into cloud resources can introduce operational complexity and create compliance risks.  
 
Dedicated infrastructure addresses these and other challenges. Community banks and credit unions—as well as fintech organizations—can build analytics environments while avoiding unpredictable costs, complexity, and regulatory risks. 

Starting with the Workload  

Too often, technology leaders begin the infrastructure decision-making process by focusing on their budget. It’s only after they’ve found solutions within a target range that they examine capabilities.  

Starting with the workload is a better approach. Technology teams should identify what hardware (and software) resources are required to support each specific workload. They can then determine the right server size and evaluate pricing options. Starting with the workload helps prevent teams from choosing the wrong infrastructure just because it perfectly matches their budget. 

Building an Analytics Dashboard on a Bare Metal Foundation  

For steady-state workloads, like those that support data analytics, bare metal servers are often the right foundational infrastructure. Consider some workloads that a community bank, credit union, or fintech might run: 

• Loading credit card settlement data into a SQL database 
• Calculating fraud scores using transaction records and account holder profiles 
• Generating CD product leads through data segmentation 

These workloads would all benefit from running on bare metal servers, with single-tenant CPU and memory, dedicated network interface cards (NICs), flexible storage, and predictable network paths. By choosing bare metal infrastructure instead of multi-tenant public cloud environments, teams eliminate hypervisor scheduling and noisy-neighbor I/O contention that can cause performance issues.  
 
In addition to delivering better performance than shared cloud environments, bare metal infrastructure can provide more predictable costs. These workloads do not typically burst, so they don’t need the burst flexibility that cloud environments can provide. Organizations can avoid the high, fluctuating bandwidth costs that come with that unneeded flexibility.  
 
On top of this bare metal infrastructure, teams can easily connect to an open-source business intelligence (BI) tool, like Metabase. Using Metabase, teams can build an analytics dashboard that would be available to authorized individuals from this private, compliance-ready environment—all on infrastructure that the organization controls. By using dedicated hardware, without the performance issues of a shared cloud environment, they can ensure that the dashboard will load cleanly and that queries will return in time for analysts to act on them. 

Meeting Compliance Requirements 

How do community banks, credit unions, and fintechs ensure that infrastructure is truly “compliance-ready?” Identity and access management is essential. In addition, implementing encryption and network isolation helps to ensure that data remains secure even if attackers infiltrate the network. 
 
The right infrastructure provider should add safeguards for the foundational infrastructure.  For example, the provider should hold a SOC 2 Type II report for its facilities and a facility-level attestation of compliance (AoC) at its Payment Card Industry (PCI)–validated data center locations, which will cover physical and environmental controls aligned to PCI Data Security Standard (PCI DSS) Requirement 9. 
 
The organization would then manage the server layer above that foundation. It would continue to operate its own compliance program, use its own qualified security assessors (QSAs), and implement its own data governance requirements. 

With this shared-responsibility model, the community bank or credit union is not handing off compliance to a vendor. It is building on a secure, compliant foundation that the infrastructure provider has already attested to, and that the financial institution’s QSAs can reference. 

Predicting Costs and Simplifying Management 

Many organizations—across industries—moved workloads to the cloud to avoid capital expenditures. But then they realized that fluctuating cloud expenses complicate cost calculations and often erase savings. When organizations have steady-state workloads, which don’t periodically burst, that cloud cost model doesn’t make sense. Bare metal infrastructure is a better fit: It offers flat monthly pricing for dedicated hardware so there are no surprises.  
 
The right infrastructure provider also helps simplify management while giving teams sufficient visibility and direct control over their environment. For example, with bare metal infrastructure from Hivelocity, teams can use the myVelocity portal and API for managing API-driven provisioning, private VLANs, and Intelligent Platform Management Interface (IPMI) access without a ticket queue.  

Rethinking Infrastructure for Financial Services 

For community banks and credit unions that need infrastructure to turn data into insights, the cloud might initially seem like a suitable approach. But in most cases, a bare metal infrastructure will better meet the requirements of these workloads. Using dedicated servers, these financial institutions can easily build analytics dashboards while improving performance, achieving more predictable costs, and maintaining greater control over their infrastructure than with shared cloud environments.  

Learn more about why bare metal infrastructure from Hivelocity is a better choice than shared cloud environments for financial services. 

FAQ

Q: What are the disadvantages of using public clouds for small financial institutions and fintechs? 

A: For community banks, credit unions, and fintechs unpredictable cloud costs can erase the potential financial benefits of using the cloud. Shared cloud resources can also create latency for workloads that require fast action. And the lack of visibility into cloud infrastructure can create compliance risks. 

 

Q: What kinds of financial services workloads are best suited for bare metal infrastructure?  

A: Steady-state workloads that never burst are the best fits for bare metal infrastructure. Those workloads might include fraud-scoring services, credit card settlement processing, market data ingestion, databases handling account holder records, and analytics platforms. Using dedicated hardware for those workloads, organizations can eliminate the performance issues and unpredictable costs of the cloud. 

 

Q: What is the right first step for a financial services organization or fintech interested in bare metal?  

A: Teams should begin by identifying workloads that have sustained loads and then defining workload requirements. They can then determine the correct infrastructure sizing and evaluate pricing. By starting with workloads, instead of a budget target, organizations can help ensure they are not paying for more than they need.