I read an interesting article recently that outlined the way in which cloud adoption has changed the business landscape, causing a seismic shift in how organisations operate. Depending on your source UK cloud adoption rates are currently anywhere between 78 percent and 84 percent, and whilst cloud is no longer a new phenomenon, its importance to not only the CIO but also the full c-suite of decision makers such as CEOs, CMOs and CFOs, is paramount as they jostle to gain a competitive advantage over their competitors.
It has been argued that cloud adoption heralds the largest disruption in enterprise computing since the advent of the PC, with many industries embracing cloud-based platforms to not only cut costs but also drive efficiency. Despite this, there still remains a certain amount of trepidation from the financial services sector to make the transition and fully embrace cloud and its many advantages.
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At the mere utterance of the word ‘cloud’ you will hear a plethora of reasons why financial services organisations cannot make the leap. There are the concerns over regulatory compliance as well as the complexity of functional replacement, security and control. But, in an era where financial institutions are more highly regulated than ever before, one may forgive these organisations for a tentative approach to change. To further validate the hesitance, financial services firms are reportedly hit with security incidents 300 percent more frequently than other industries.
However, it’s not all doom and gloom for the financial services sector. In mid-2016, following the publishing of the Financial Conduct Authority’s (FCA) final guidance for UK regulated firms outsourcing to the cloud, it was made clear that there is no fundamental reason why financial services firms cannot use public cloud services, so long as they comply with the FCA’s rules. This statement and guidance provided will certainly be welcomed by those UK financial institutions that have been hesitant to embrace cloud due to the lack of regulatory certainty over its use. This also serves as good news for the cloud sector too, providing a boost in the uptake of cloud services in the sector.
Regulatory compliance and managing cyber risk do not need to be the enemy of innovation. In fact, taking a risk-avoidant approach to experimenting with new business models or user experiences will be a fast path to obscurity in today’s business landscape, where innovation and competition can come from anywhere. Banks and other players in the financial services ecosystem should seek out technologies that meet compliance and security needs but also enable agility and flexibility.
Here are three quick benefits that cloud can provide for the financial services sector:
- Enhanced Security – Contrary to popular belief businesses who take advantage of cloud computing may actually enjoy stronger security than those who try to go it alone, and with an on-premise system. The cloud is certainly more secure than many legacy platforms, so if financial organisations choose the right cloud deployment, they can actually experience a higher level of security than they would via legacy solutions.
- Reduced Infrastructure – As your financial services firm grows, so does its information technology hardware and software needs. By migrating to the cloud, your company can reduce the amount of infrastructure stored onsite, share liability with qualified technology partners, eliminate much of the hassle associated with procuring hardware and software, and possibly even reduce costs in the process. There is no longer a need to purchase multiple servers and supporting equipment, store it on-site and pay for the space and utilities to support the operation of that infrastructure.
- Increased Business Agility – Cloud computing brings with it a number of benefits related to agility. First and foremost, cloud computing is built with mobile productivity in mind. Employees need no longer be tethered to their desks. Applications and information can be accessed from virtually any device with Internet connectivity, allowing your staff the access needed to be effective, without being tied to the office.
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By embracing cloud computing services, companies in the financial sector are able to add vast efficiency to their operations. As long as the risks can be managed, there are many benefits. Cloud services can eventually help companies enter new markets, benefit from new opportunities, and strengthen their business processes. Further, cloud computing can help financial firms reduce the setup and operating costs related to installing new hardware and software or acquiring storage in the data centre by making the necessary infrastructure resources available.
If your financial services firm has been hesitant about a migration to cloud computing, it may be time to reconsider. Enjoy stronger security, lower your maintenance costs and unleash the productivity potential of employees by migrating to the cloud.