The financial services sector is well known for its caution surrounding technological change, due to its history of regulations, legacy and money handling. However, with constant pressure on IT budgets and the need for digital innovation, financial services firms can no longer ignore the benefits the public cloud have to offer.
In a recent survey, 74 percent of banks report that the cloud will become a major factor in the industry within the next five years. Why? Because the cloud offers the financial services a cheaper, more scalable and agile way to improve their business operations without having to compromise security or compliance.
In this blog post, we’ll discuss the business case for moving your financial business to the cloud. Here are four benefits that may help solidify your decision to embrace digital transformation:
1. Cost Reductions:
In today’s unsteady economy, financial services are not just looking for ways to cope with cost pressures; they’re looking to invest in innovative technology to help them:
- Compete with FinTech insurgents
- Improve operational efficiency
- Accelerate modelling and analysis
- Serve customers better
- Differentiate themselves in the market with innovative services
It’s no secret that well-architected environments in the cloud are a cheaper alternative to co-location or on-premise solutions. In fact, 88 percent of financial institutions believe that the reduction in TCO (total cost of ownership) is the biggest benefit of a cloud-based infrastructure. By embracing the cloud, money that was once spent on capital infrastructure and keeping servers cool can instead be used to focus on operations and opportunities that matter to individual businesses and their customers.
2. Integrated Security:
Although traditional data centres offer businesses a physical sense of security, they aren’t always the best long-term or most economic solution. For financial services that are planning on scaling their business and using new, innovative technologies, moving some of your infrastructure to the cloud is almost inevitable.
It’s important to note that this move does not make your data less secure. Despite the security myth surrounding cloud technology, your sensitive information will remain safe on the cloud, providing your financial business has a clear and strictly implemented security policy. Your level of security also depends on your cloud service provider.
Here are some examples of security features your provider can offer:
- Access control that allows you to choose who in your business can, or cannot, access sensitive data. For instance, Azure Active Directory helps ensure that only authorised individuals can access your applications, environments and data.
- Behaviour analytics that can detect threats and anomalies and report any unusual behaviour or unauthorised access.
- Integrated security across all of your business’ applications, meaning that employees are safe to work from anywhere.
- Continuous monitoring of your servers, applications and networks to detect threats. Businesses also have the option to deploy third-party security solutions within their cloud environment, such as firewalls and anti-malware.
- Physical security. For example, Azure’s regional data centres include fencing, CCTV and security teams.
- Shared security with your cloud service provider. In order to keep your data as secure as possible, your business needs to take responsibility for your own security practices, in regards to your applications and employees.
3. Quick & Economic Scalability:
Growth is important to all businesses, particularly when you’re handling new customers and data on a daily basis. With the cloud, companies can scale and deploy releases quickly and continuously (either automatically or manually) according to demand, or reduce resources if needed. This means that you only need to pay for the platforms that you actively use across your business or IT infrastructure.
For example, an insurance firm may need to run complex risk models to respond to market changes. Doing these calculations in the cloud lets them access hundreds or even thousands of processors to complete the modelling quickly. Yet, this performance isn’t required all the time so delivering this kind of high-performance computing cluster in-house is prohibitively expensive.
4. Big Data, automation, and analytics:
Storing large amounts of data isn’t much use if you don’t know how to handle it. Unlike traditional storage solutions, the cloud delivers a better, cheaper and more personable approach to big data and analytics. The intelligent insights you can harness allow you to deliver the best internal and customer engagement actions for your business.
Big data and integrated customer relationship management tools can allow you to:
- Gain a 360-degree view of customer information and profiles. This can allow financial services to gain a better insight into customer trends and risks, as well as offer an opportunity to improve customer services.
- Analyse transactions and operations quickly without having to manually look through masses of documents and memos. Ultimately, this allows the financial services to gain better insight into market trends, provide better customer service and help to automate some time-consuming workloads.
- Access structured and unstructured data quickly across one integrated platform. Financial services are able to analyse this data to gain insights into regulatory risks across all disparate sources.
Due to the regulations surrounding financial institutions, these organisations have historically been slower at adopting the cloud than other verticals.
However, the competition is not going away. The financial services industry is being challenged by more digitally focused banks that are able to offer their services quicker and more efficiently. This is because they have built their infrastructure in the cloud.
Using an experienced partner can help you to achieve the maximum benefits the cloud has to offer. So, if your financial business is ready to make the move to the cloud, contact us here. We’d love to hear from you.