The financial services and banking sectors have often been early technology adopters. However, when it comes to cloud computing even the largest organisations have been somewhat held back by the regulatory, security and cost barriers.
As such many smaller companies in the sector have been reluctant to migrate to the cloud, in contrast to other sectors where SMEs are already thriving in cloud environments. So, how can the financial sector catch up?
2020 and the pandemic proved for many that cloud computing was not just a tech buzzword, but actually a crucial business tool that allows efficiencies, flexibility, security and robustness into a business. A sure sign of the sector’s increasing willingness to adopt cloud solutions was the announcement in December that the Bank of England was looking to ’unlock the potential of the cloud’.
The pandemic also highlighted to many in the sector how cloud can be crucial for managing and ensuring business continuity during crisis periods and allowing home working to be effective. Put simply cloud computing allows employees to work anywhere without losing the ability to collaborate and ensure productivity. It also allows workforces to access company files on a shared drive, from most devices, meaning that they don’t have to be in the same office.
In such uncertain times, cloud also means that companies do not have to invest in on-site servers or infrastructure that they may not end up using. The ‘just in case’ procurement of infrastructure has over the past year been highlighted as an unnecessary expenditure. Cloud allows companies to ramp and ramp down dependent on need, saving budget whilst providing real efficiencies.
Despite the advantages, many of which have to come to light over the past year, for those in the financial sector, Fear, Uncertainty and Doubt (FUD) continues to dominate. This is largely because of the security and regulatory doubts that continue to linger, particularly for smaller companies.
The public cloud remains a particular barrier for many smaller financial services organisations. Many are maintaining on-premise servers, or private cloud in order to ensure, in their mind, the security levels needed to protect data and adhere to regulations. However, we have seen confidence in public cloud increase over the last few months as financial services companies see the real benefits of migrating across.
Concern around security has been addressed by the continuous security improvements in the public cloud over the past few years. Further to this, public cloud service providers are rapidly meeting global compliance requirements, making a move to the public cloud an easier and more secure decision for smaller financial services organisations.
Another route that many are taking is a half-way house. Hybrid cloud allows companies to use a mix of computing, storage and services environments, made up of on-premise servers, private cloud and public cloud. This allows some data to be virtualised and migrated to the cloud, whilst other, perhaps more sensitive date, can remain within the on-premise server. This gives organisations time to understand better how cloud might work for them, gain a good understanding of the security in-place, as well as the advantages gained from cloud. Once the confidence has been built a gradual migration can begin.
Many smaller financial services companies are looking at migration to the cloud, but are unsure of the first steps, what is available, what data to migrate and how it will impact their security and regulatory obligations. Some are turning to independent consultancies to help. Here at Northdoor we have a large amount of experience in helping financial service companies choose the right environment for them.
Utilising managed services also takes the complexity out of migration to the cloud allowing your in-house team to focus on other key aspects of the business. A managed service team can design, deploy, operate and manage cloud environments. If smaller financial service organisations do not have the depth of knowledge within their own in-house IT team, or the team is already stretched, managing services can ensure that you are making the most of your cloud investment, whilst being confident that security levels are high and that you are adhering to regulations.
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