Adoption of Cloud Computing for Financial Services - iCorps
Did you know that more people are worried about having their computer or smartphone hacked than they are of getting mugged or their car stolen?
Sixty-two percent of people recently surveyed by Gallup frequently or occasionally worry about having their computer or smartphone hacked and their information being stolen. In comparison, 31% worry about getting mugged and AND only 18% of people were concerned about being murdered.
Coming off of a year when major retail data security breaches hit our news stations seemingly every other week, it’s not much of a surprise that the hacking of our personal information is of top concern. Still, the numbers are certainly telling: the security of our data – which ties back to our finances, our well-being, our families and our hard-earned money – that’s what keeps us up at night!
It’s also not surprising then that the adoption of cloud computing has taken a slow course for the financial services industry. It was once believed that the financial services industry would never switch over to the cloud mainly because of security concerns, data protection and performance problems. But recent reports and our own experience within the industry, lead us to believe that the walls of resistance are slowly but surely coming down.
We can probably all agree that the financial industry’s adoption of cloud technology SHOULD carry a high degree of discretion and concern for security. Financial companies’ responsibility for essential data, capital and personal information automatically put them at high risk for cybercrime.
But with security improvements like 2 step verification and data encryption, the implementation of disaster recovery plans and dependable cloud storage reducing the risk of data breaching, confidence in the cloud is increasing.
For the financial industries, a leap of faith to the cloud looks a bit more like baby steps. A March 2015 report published by Cloud Security Alliance suggests that many companies are taking those steps and developing a cloud strategy to put into place. Developing is the key word. Cloud strategy should come with a methodical and well-researched execution plan.
David Linthicum, of Datamation.com, argues that financial companies who make the effort to do some planning ahead of time, can actually experience better security with cloud computing:
“The reality is that, if financial services firms do just a bit of planning, most public or private cloud computing systems should provide better security than your applications and data currently enjoy. At the same time you upgrade security, you can install a data and service governance approach and system that will provide better managed and controlled IT infrastructure.”
The good news is that finance companies that take those steps and do it right are seeing positive returns. Amongst the top reasons for cloud adoption by financial services are: flexible infrastructure, reduced time for provisioning, reduced total cost of ownership and shorter time to market, according to the Cloud Security Alliance report. With the ability to access services like CRM, email and shared files from practically any device with internet access, the cloud gives firms the ability to conduct business from virtually anywhere at any time. Reduced costly hardware purchases, installations and labor costs are just some of the cost benefits the cloud brings. It’s hard to resist something that is offering flexibility AND reduced costs, isn’t it? As cloud providers continue to tailor their services and beef up data protection for the unique needs of the financial industries, the major benefits will only be more clearly revealed.
A hybrid strategy
No one is strong arming financial industries to go full cloud. In fact, there are some situations in which cloud solutions do not perform as well as on-premise solutions. As is the case in any industry, discovering what is best for your business structure, technology needs, compliance regulations and growth goals is the first step in long-term IT planning. According to the Cloud Security Alliance report, of those finances companies that are developing a cloud strategy, a large percentage are “actively taking on integration of in-house services with public cloud environments.”
This hybrid approach allows you to move a portion of your IT functions to a cloud-based server, while some of your other IT and data remain in-house or on-premise. This hybrid approach where some solutions are cloud-based, while others are on-premise and managed by a service provider, is definitely gaining in popularity and should be a considered a strong option for those in the finance industry.
So we’re certainly not suggesting that you go “all cloud or go home.” But with a tide of financial services starting to develop some form of cloud strategy to increase productivity and curb costs, it’s time to consider your next steps.