When picturing a cloud, one might envision a fluffy, white,
billowing mass floating through our pale, blue atmosphere,
but when it comes to the internet, the cloud should be seen
more like a thundering tornado.
Growth in online computer storage and other online services available through
remote servers is expected to reach $180 billion in end-user spending by 2015.
Many businesses are already embracing the cloud and all it has to offer and the financial
industry is no different. But our Wall Street wizards and other professionals in the
financial sector face different challenges when it comes to utilizing this kind of technology.
They are governed by a myriad of rules and regulations that hinder them from
posting their investment and other money-related content online or anywhere else for that matter.
Legal and Compliance Issues
Several key issues are recognized by IT departments before cloud computing becomes a viable solution. These include:
- Data privacy
- Systems security
- Business continuity and contingency planning
- Liability and risk management
Overall, financial regulatory agencies have indicated that they will apply the same requirements and standards to cloud computing activities that apply to technological outsourcing activities in general.
Security Concerns
Many are worried that cloud-based technologies are a hacker’s dream come true and this sensitive financial information would be more vulnerable if shared on these servers. However, the fact of the matter is that with proper planning, the majority of cloud platforms are actually quite safer than the device-to-device communications that many of us utilize on a daily basis, including smartphones.
Furthermore, 63% of businesses in financial services are already using cloud computing technologies. Figures like these are likely to rise in the future with the global popularity of this growing technology.
Benefits of Moving to the Cloud
While the general rewards to cloud computing storage are many, including reduced spending on technological infrastructures, streamlining processes, increased accessibility and improved flexibility, there are many specific benefits that apply to the financial sector in a unique way.
Here are a few less understood and hidden values to this technology available for this particular industry:
- Agility – Most companies already understand that cloud computing provides better agility for businesses, but many don’t factor this into their ROI thinking when it comes to this technology. Agility through the use of cloud computing comes via the ability to move quickly into new markets, adapt core business processes around new business opportunities in a timely manner, and/or grow financial services through acquisition.
- Procurement – When building systems in the world of financial services, you have to deal with different budgetary issues when it comes to buying hardware, software, and even obtaining space in the datacenter. Cloud computing allows you to wire around those issues, giving businesses the opportunity to go directly to the provider for all the infrastructure resources required to operate a system.
- Improvement – In many cases, the transition to cloud-based technology means a system migration from one platform to another. Take the time to improve the code and database as the application moves to the cloud. Most changeovers to cloud platforms will at least drive some platform-specific changes anyway. This is a common benefit for financial services firms that move to cloud computing.
Moving Forward
Those in the financial IT departments should already be familiar and literate with the risks and rewards associated with the types of services that cloud technology has to offer. Although the use of these resources may still be new for most financial service firms, utilizing cloud-based technology is the clear direction for the future.