Why financial firms are missing out by not embracing the cloud
The financial sector’s high security and compliance standards have traditionally made it something of a laggard in the adoption of cloud computing. Yet there are indications that momentum is shifting and finance institutions are beginning to benefit from the agility, flexibility, speed and innovation that is missing when running large, on-premise data centres.
But just how secure can customer data and commercial operations be when stored and running on someone else's infrastructure? The short answer is: very secure. Indeed, cloud services should be at least as secure if not more secure than their in-house equivalents.
Financial organisations have large and complex IT infrastructures that rely on mission-critical legacy applications while conforming to strict compliance criteria and extremely high security requirements. These factors combined, it’s no wonder that cloud computing within finance has traditionally had slow uptake and been met with scepticism. The advancement of flexible cloud hosting options, including the hybrid cloud model, should help financial institutions overcome infrastructure barriers and ensure compliance and security requirements can be met. All it takes is some careful planning to create a secure and reliable cloud solution that provides financial enterprises, and their customers and clients, peace of mind.
When planning a move to the cloud, confusing security regulations in the EU can be a major issue for financial organisations. A recent study by the European Union Agency for Network and Information found that nearly a quarter of survey respondents felt confusing cloud security regulations in the EU were the main obstacle for implementing a cloud solution. Take the EU Data Protection Directive for example. This regulation governs the storage and transmission of personally identifiable data – making it complicated to ensure security compliance when service providers, as they often do, have multiple data centres in different locations.
These confusing regulations, along with the limitations of traditional cyber security in a cloud environment mean a big headache for IT leaders, stalling the transition to the cloud.
A loss of control is another common concern for CIOs in financial institutions. However, this is no longer a problem as it is possible to roll all your cloud services, whether they are public, private or hybrid, into one single management solution that is controlled and secured centrally.
Contrary to common belief, a cloud solution can actually lead to enhanced security. Financial institutions can implement a public cloud solution, a private cloud solution, or a combination of the two. These solutions often offer institutions more robust security than their IT teams can execute on their own along with additional resources for governance and monitoring. This is because the security elements have been built-in from the ground-up and reviewed by experts outside the institutions.
It is also important to note that embracing the cloud gives financial institutions increased agility and responsiveness. This means that banks can quickly move into new markets and adjust business operations rapidly after an acquisition. Migrating to the cloud is also a great chance to improve code and platforms by installing easy, scalable solutions while avoiding the issues surrounding hardware, software, and additional data centre expenditure.
As more enterprises migrate towards cloud solutions, financial institutions need not be left behind. Cloud computing provides enormous potential benefits to organisations and considerations such as security and compliance should not hinder the migration. With a trusted partner and careful planning, even the most complex IT ecosystems in a financial institution can be moved to the cloud and start reaping its numerous benefits such as agility and flexibility.
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