Cloud adoption is on the rise. As noted by a recent RightScale survey, hybrid cloud adoption now tops 71 per cent year over year. The cloud is also maturing — the need for highly skilled professionals has replaced security as the top business concern. In effect, a “skills gap” has emerged as purpose-built cloud technology advances at a breakneck pace. Despite a burgeoning market, however, the financial industry has been slow to adopt this new technology; here are five ways cloud advancements are impacting the future of finance.
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Strategic Thinking
Financial institutions ensure continued profit, not only through sound present-day business practices, but by making intelligent predictions about future trends. As noted by Forbes, finance teams are increasingly on the front line of decision-making and often tapped by other departments to make informed judgments about both spend and investments. Cloud-based finance systems now offer the ability to analyse historical and operational data, in turn generating both prescriptive insights — used to streamline current business processes — and predictive groundwork, used to suggest the most profitable course of action moving forward.
Collaboration
Financial decisions are rarely made in isolation. Often, approval from one or more business units across disparate geographic locations is required before high-value agreements are signed or new strategies are adopted. Cloud technologies support the adoption of critical communications technology such as voice over IP (VoIP) and video conferencing — allowing international connections without needing to leave local offices. Cloud solutions also make it possible for project teams to collaborate in real time and create a continuously updated set of documentation to ensure both data continuity and security.
Fraud Detection
The advent of sophisticated malware strains and phishing efforts make fraud a serious concern for every financial institution. Both customer accounts and internal networks are at risk for cybercriminals that breach IT defences — at best, companies lose time tracking and stopping malicious actors. At worst, they lose money and public trust.
Advanced cloud-analytic platforms use a combination of raw data and behavioural analysis to determine the likelihood that a particular transaction or user behaviour is fraud rather than legitimate. Companies can set a specific notification threshold in addition to creating automated responses to both quarantine threats and ensure security pros have the necessary data to act.
Resource Use
To meet the challenges of increased computing demand, financial companies have historically made large, on-site hardware investments. The problem? Even with rapidly increasing server density and enhanced data storage processes, there’s a finite limit to available resources. Not so in the cloud — companies pay for the performance they need and can scale up on demand. In addition, businesses are not responsible for the maintenance or upgrading of cloud-based hardware, meaning they can transition from a variable combination of CapEx and OpEx spending to consistent and controllable OpEx month to month.
Intelligence
According to the Financial Times, the development of artificial intelligence (AI) in the cloud also promises to positively disrupt the financial sector. There are several possible avenues of advancement based on this premise. For example, adaptable intelligence tools could be used to enhance security through the use of facial and behavioural recognition technology. Language-based intelligence, meanwhile, could drive the development of enhanced self-service finance solutions, giving consumers increased flexibility without compromising security. Eventually, cloud-based AI could help streamline the distribution of resources and data across complete enterprise networks.
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The cloud has moved from outlier to fundamental infrastructure for many organisations. While financial companies have been hesitant to adopt this technology in an effort to ensure both compliance and data security are unaffected, cloud solutions are now mature enough to not only support effective financial governance but help companies secure a solid, revenue-driven future.