Adopting cloud solutions has always been this fearful thought in people’s heads whereas it shouldn’t be. Especially, when it comes to the financial industry, we’ve seen that a lot of financial institutes are slow at adopting cloud computing technologies because of the fear of its implications.
But what most people in the industry don’t know is that for IT leaders, C-suite executives, and board members, cloud computing is moving to the forefront. It will soon be known as the catalyst for transformation of all businesses and a game-changer for how financial service organizations will operate in the future.
Must Read: How Cloud Computing Adoption is Accelerating
According to Analytics Insight, Cloud computing is expected to reach $832.1 billion by 2025. That said, the pandemic, like most of us know, has accelerated cloud adoption because it presents a rather compelling solution to remote operations that were largely frowned upon by financial institutions before the pandemic.
Top Concerns of the Finance Sector in Regards to Cloud Computing
Banks in the future will look very different from what they look like today. With the changing consumer expectations, emerging technologies, and alternative business models, banks will need to start putting strategies in place in order to help themselves be prepared for the future.
Today, we’ll give you an insight on some of the top-most fears of financial executives and will present to you the benefits of cloud computing in the finance sector which will help you understand why cloud computing in finance industry is a good idea.
Fear of Data Control
Normally speaking, in the world of cloud computing, data is shared at server levels called the ‘multi-tenant’ cloud and that is where all clients share a central infrastructure. But this centralized nature of the cloud which we consider efficient is also what makes finance executives, banks, and credit unions uncomfortable. This is because they don’t like the idea of sharing data. They instead prefer to have their own servers.
Compliance violations, malware infections, data breaches, and identity thefts are the first and foremost reasons why the finance sector is concerned about security. They believe that moving data away from servers owned by financial institutions means they have to closely examine how that data will be managed in the cloud which can be consuming. They’ll need due diligence on data protection, data localization, and data sovereignty for any technology that they consider.
Similarly, account information of users which is stored in a cloud environment, like emails, etc can be stolen by hackers for unauthorized activity leading to identity theft. This again asks finance executives to audit security performance of cloud solutions. This alone is not the reason for concern. When security threats occur, consumer trust is eroded and the potential of revenue loss is notable.
However, while hacker attacks seem to be good in terms of security, a lot of financial institutions and firms are already using cloud technology. This is because they’ve undertood that the real benefits of cloud computing outweigh the risks.
Benefits of Cloud Computing for the Finance Sector
Banks and other capital market leaders have increasingly recognized the fact that cloud is more than just a technology. That’s right, it is a destination for them to store data and applications while simultaneously accessing advanced software applications over the internet.
Apart from that, here are 9 more benefits of cloud computing for the finance industry:
1. Saves Cost
According to Salesforce, 50% of all IT leaders surveyed said that the benefit of cost savings from using cloud applications was phenomenol.
94% of businesses saw improved security after migration to cloud solutions and 91% said that the cloud made government compliance requirements easier to adhere to.
65% of them agreed that the most important benefit of the cloud technology is its ability to meet business demands quickly.
AIIM found that organizations that prioritize employee satisfaction are 24% more likely to expand cloud usage. And through cloud environments, businesses get the power to easily accommodate remote employees and anyone outside the office.
With information being stored in one central online location, it becomes easy for team members to access and share it from anywhere.
Using cloud-based systems helps in keeping the quality of work in the same formats. This means that everyone who accesses the same information will see the exact same information as others. This helps in maintaining consistency across data and users. Cloud systems also have documented records of updates in order to monitor and control quality.
With automatic updates from cloud applications, 50% of cloud adopters said they relied on fewer internal IT resources.
8. Edge Over Competitors
77% of businesses say that cloud technology has given them a competitive advantage and 16% of them say that its advantages are significant.
Cloud environments any day lower a business’s environmental footprint. Thus, sustainable.
Conclusion: Applying cloud technology in the finance sector will help banks and other financial institutions in not just leveraging the technology’s value as a cheaper, faster, and more “elastic” alternative to on-premise data storage but also to create new business frontiers and drive improved business performance and shareholder returns.
Recommended Read: How to Optimize the Cost of Cloud Computing