Cloud computing in financial service organizations
While technology seems to be the cost and time efficiency driver in many industries, cloud computing is the emerging solution for the financial service industry, especially capital markets. In order for their assets to be used optimally by multiple consumers, financial organizations require ad-hoc access to significant computing resources, virtual desktops, shared data information, cost transparency, and “What-If” capabilities.
I will list some of the most important cloud changing perspectives that can benefit large corporations and SMB’s:
● Resource Management – enables organizations to build agile, responsive data center infrastructures;
● Pay per Use – organizations pay only for the computing resources they are using and not more;
● Centralized Sharing – resources can dynamically be rented to application owners in the organization;
● Shorten Deployment Times in extending services – in developing and testing new applications; the cloud platform can be up and running in hours not months.
● Reduce IT Costs – defer capital and operational expenses;
● Disaster recovery planning – cloud computing is viewed as a successful recovery solution to store critical information in another location;
● Green credentials – great energy savings, a fact which translates into being environmentally friendly.
If you browse the financial industry news, compliance and security concerns continue to constrain the industry growth. In the last few years, private clouds offering complete control over data and security are the most widespread option for financial organizations. On the other hand, public and hybrid clouds are still a limited choice, offering less information and visibility on the data and security measures implemented in the cloud environment. Because of today’s perceived lack of control, banks that wish to move forward with public cloud computing are advised to test the model on smaller projects and less sensitive data, a fact which I agree with.
For the highly regulated financial services industry to adopt and implement cloud computing solutions with confidence there are two important aspects to be clarified, besides being more transparent in their security measures. They must build a regulatory guidance associated with cloud technologies and thoroughly see the implied changes in risk management.
Therefore, I consider that cloud computing has not yet reached its potential in the financial service industry because the benefits for extended cloud use and integration of public and hybrid clouds are not yet fully acknowledged. For applied cloud integration examples in financial services, you can read more in the Wall Street article in which Amazon shares its experience: “Amazon Looks to Increase Presence in Financial Services Cloud”.
Photo source: https://www.sxc.hu/photo/1290130.