Across the Financial sector the debate around using cloud services is continuing, with many differing views. It is not surprising, that in a heavily regulated industry, in which, the guilty are ceremoniously and publicly punished, that fear and being cautious, can be seen as advantageous, and have become ingrained in culture.
However being cautious, can bring its own pitfalls, meaning that vital and necessary leaps in innovation and services fail to be realised, allowing savvy and brave competitors to gain advantage and capitalise. So what are the issues holding up cloud adoption?
We have seen significant movement within the sector around cloud, and in a recent study by the Cloud Security Alliance “How cloud is being used in the financial sector 2015”, it was noted that cloud services are becoming more prevalent, using a mixed strategy to deploy. These tend to fall into two camps, there is a current leaning toward private cloud, and growth in the hybrid model, of public and private cloud. However, it is imperative that before any changes are made, organisations invest in a having a clearly defined strategy.
The CSA report, concluded that 61% of financial institutions surveyed are developing a cloud strategy. This is a key indicator that cloud services will form a key part of IT and service provisioning in the future. In addition, a number of leading institutions have already dipped toes or have moved into the cloud with positive results.
Bankinter, a Spanish institution, took advantage of the available processing speed and power of cloud, which helped them reduce the time required to undertake risk analysis, from 23 hours to under one hour. Another example is the Common Wealth Bank of Australia, who moved to web services, reducing its expenditure from a whopping 75% of total outgoings to just 25%.
It is not just huge multi-nationals that can benefit, a simple example of how the cloud can deliver savings could be a new server deployment. Traditionally, the time needed to deploy a new in–house server could be several weeks, in the cloud, this can be provisioned in minutes; the result is significant cost saving and improved operational efficiency.
So what are the key drivers for adoption?
The CSA study found that having a flexible infrastructure, and reduce time to provision infrastructure or services, are leading the way for cloud. The results of the study are shown below;
What the sector wants?
In addition, the CSA study revealed that institutions are looking for the cloud to deliver a mixed feature set, but primarily around analysis, control and provisioning.
Hurdles and Barriers.
It would be foolish to think that the cloud, is the savior and somehow alleviates every headache and challenge. Whilst there are clear advantages, there are also perceived disadvantages to the cloud. The three main areas of concern are:
- Security concerns.
- Regulatory restrictions.
- Concerns over public breach notification.
Institutions are right to be cautious and as customers of banks, we would expect nothing less. However, cloud services are continually growing and becoming more secure. This evolution will see changes that will mitigate these concerns, and start to re-assure organisations and regulatory bodies that the perceived threats around data breach and storage have dissipated.
The debate within the financial sector around the cloud, will no doubt continue for some time yet. But with adoption growing, and organisations starting to recognise the advantages, we will see a steady move to the cloud, albeit a private or a hybrid model.
With the majority of surveyed organisations developing a cloud strategy, exploration into how the cloud could deliver advantages and benefits, can no longer be ignored. Organisations will need to reach out and engage with Managed Service Providers to understand the available services, as well as to get the insight and input needed to strategically review the options and how these can work.
The financial sector is tough, and delivering service excellence, efficiency, adaptability and scalability are all key to survival, all of which can achieved or assisted with a well thought out and executed IT and cloud strategy. To remain competitive, you can no longer be fearful, sit on your hands and ignore what the cloud has to offer.
If you would like to discuss how cloud services could benefit your business, use the contact us icons at the side of the page, and one of our specialists will contact you.