The financial Industry has not been averse to the rising popularity of cloud computing. The largest financial institutions have witnessed how cloud technology has affected some of its sectors such as insurance and banking and in a positive way. They may not be shouting from the rooftops but they agree with the fact that the cloud phenomenon has helped them ease their operations and function more efficiently.
Skyhigh Networks did a survey to check how comfortable financial organizations are with using the cloud technology. According to their survey results, an average financial services company uses more than 1,000 cloud services.
The report was based on survey data collected from 3.7 million employees at banks, insurance companies, and credit card firms among other financial institutions. But what are the reasons that make these organizations comfortable in using cloud-based services?
How does Cloud Computing benefit the Financial Industry?
There is not a doubt in anyone’s mind that security is the prime concern when embracing any new technology, especially the cloud-based offerings. However, many businesses are moving to the cloud nowadays to strengthen their security infrastructure.
Due to the year on year increase in the number of data breaches and cyber attacks, it is difficult to have a foolproof IT environment safe from hackers. Within a traditional IT setup, something as simple as a phishing email attack, albeit in a sophisticated manner, has the ability to bring the whole network down.
Cloud computing provides a highly resilient security architecture and goes through stringent security checks at regular intervals.
Cost optimization may not be a priority for this industry but one certainly can’t complain about the collateral benefits that comes with the package of cloud technology. Cloud will help curtail the expenses of servers and data centers as well as other core IT infrastructure. This removes the total cost of ownership and maintenance of the infrastructure
Storage and Big Data
Storage is one of the largest benefits of moving to the cloud. The finance industry generates unbelievable amounts of data on any given day due to millions of card transactions, stock market transactions, loans, and insurance documents and payments. Unlike the traditional IT setup where constant upgradations and maintenance is required, Cloud computing provides unlimited storage to ensure businesses never have to worry about increasing amounts of data.
Although financial institutions have more than sufficient resources assigned for all the tasks they perform efficiently on any given day, it is possible for them to see spikes in different sectors at certain times. They may also see a spike when their respective governments announce a new or change of policies in the finance sector which challenges the efficiency of their resources. Cloud computing very easily scales resources without the requirement of any intervention to make sure the duties are performed without any glitches.
Cloud vendors take very stringent measures to make sure that in joining with and offering services to finance industries, no compliances are violated by either party. Compliance bodies work with some of the major cloud vendors for monitoring purposes. However, financial institutions should make it a point to discuss minute details before signing up with any vendor.
Cloud computing enables employees to work on the go. They can use their personal smartphones and tablets for real-time monitoring and analysis, as well as access company emails, proprietary business applications, and CRM tools when they are out of the office or outside of business hours.
According to a survey by Finextra Research, 83% of respondents said their bank’s existing core technology can no longer support its needs. Furthermore, nearly 90% are in favour of including SaaS or cloud based services as part of the new infrastructure.
Here’s what report contributor and independent financial consultant Chris Skinner had to say on moving the IT infrastructure to the cloud: “You cannot become a digital bank without core systems renewal; you cannot renew core systems without using cloud for data management; you need to consolidate data in the cloud to be able to perform effective data analytics; and when you’ve renewed core systems through the cloud to perform data analytics, then you can innovate.”
The cloud is taking the world of technology and all industries by storm. Finance industries, in particular, should not delay in transitioning to it.