Financial Services Firms Poised to Take Advantage of Cloud Computing

Even if you were to take a cursory view of the latest technology buzz, it is difficult to miss the topic of “cloud computing.” With industry giants such as Microsoft, SalesForce.com, Amazon, and IBM leading the charge along with a large multitude of start-ups it is easy to conclude that the IT landscape is changing. Today, one of the industries poised to take advantage of this change is Financial Services.

For many banks and credit unions, building a technology infrastructure to meet current or evolving business needs is easier said than done. Budget, people, and/or capacity constraints affect the ability to establish technology capabilities necessary to run and scale operations. “Cloud computing” is an innovative solution for improving technology capabilities by taking advantage of business applications and computing power made available over the Internet.  Banks and credit unions have been leveraging service bureaus or outsourced core banking platforms for decades. Cloud computing takes the same concept into the modern age with technologies such as those offered by Salesforce.com, Google, Amazon and Microsoft. The rapidly growing array of cloud computing options provides an opportunity for banks and credit unions to reduce their internal technology footprint and gain access to technology built and managed by third-party experts.

A better cost model.
With cloud computing, companies only pay for the processing capacity they need.  By leveraging consumption-based processing models, costs scale up and down with the needs of the business. Unlike traditional infrastructure models, cloud computing eliminates the traditional step-function cost model and significantly reduces administration and maintenance of the environment.  If a bank experiences rapid growth through a merger or acquisition, the pricing model of cloud computing quickly gives it the flexibility to grow to meet the new environment. Likewise, if a bank’s needs are reduced, for example check volumes decline, costs decline too—the bank only pays for what it uses. 

Improve stability. Lower risk.
Cloud technology providers are experts at maintaining highly secure and available technology environments. Regulatory requirements around technology are notoriously stringent in financial services and are in constant flux. Rather than continually investing in extensive “high availability” technology capabilities to respond to these changes, the experts can handle it for you.

In addition, as new system and application versions become available, these third-party systems are automatically updated with the latest features and capabilities—often eliminating the need for scheduling upgrades and tying up resources, while reducing the risk of downtime or interruptions.

Is a cloud structure right for your environment?
Cloud computing can be particularly beneficial for financial institutions that are:

• Seeking to reduce technology costs or overhead
• Having trouble finding or keeping internal technology skills that are required to keep pace with today’s regulatory environment
• Positioning themselves as a nimble environment that must support rapid change while minimizing their IT investment
• Considering or implementing an expanded footprint in disaster recovery facilities
  

Getting started.
If your bank or credit union is seeking a more efficient way to support current and future operations, cloud computing may offer an attractive solution for strengthening and extending your technology capabilities—quickly, and without a substantial investment in new technology or facilities. A good place to start is a cloud assessment—a comprehensive look at processing needs, as well as current capabilities in the areas of technology, processes, and people. This type of assessment will identify applications that may run more effectively or cost-efficiently in a cloud structure.

For more information about cloud computing, please contact Jerin May.