Leading up to Finextra’s Financial Cloud Summit in March 2023, we are focusing on the future of cloud in the financial industry. Cloud migration presents a multitude of advantages for financial institutions which employ it. Cloud, like its light fluffy namesake,
is agile, mobile, and creates a secure space for financial service providers.
Cloud migration is the process of moving assets and capabilities onto the cloud from aged software, hardware, and firewall appliances. Around
54% of financial services companies expect that they will be moving at least half of their workload onto the cloud in the next five years.
The where and when of cloud migration depends on your organisation or business. It is important to ensure that the cloud platform that banks shift on to can handle their complex needs.
1. Collaboration and mobility
Many businesses have adopted some form of a hybrid or flexible working policy, such as
Klarna,
Bank of Ireland, and
Deutsche Bank. In the post-pandemic world this has become a more common form of working, and an essential option for employers to provide to retain talent.
A cloud-enabled business model can help expand ways of working by creating a space for easy and efficient connectivity for collaborative purposes.
Employees can team-up online in real-time with minimal errors and delays through cloud connectivity, making remote working arrangements more manageable and comfortable for hybrid workers. By allowing a wide range of accessibility options with the cloud,
companies are able to be more flexible with employee schedules and more sympathetic to remote workers.
2. Connectivity
Services such as Google Cloud, Microsoft Azure, and Amazon Web Services utilise rapid cloud computing technologies that enable speedy connectivity, even for significant workloads.
With many cloud service providers, data centres can be managed on a single portal with a central management tool. Cloud solutions can process data at a very fast rate, allowing for higher-performance data processing, streamlining operations, and gaining
visibility across the board.
Moreover, many cloud service providers have built-in monitoring solutions that log key metrics and equip users with relevant data on infrastructure and maintenance.
3. Cost-efficiency
Cloud has attracted many businesses especially during the pandemic due to its cost efficiency. Shifting to cloud reduces total cost of ownership (TCO), and costs of storing data on hardware.
Accenture reported that companies which transition to the cloud have seen up to 30-40% in TCO savings.
Additionally, businesses operating on the cloud typically only pay for services in use, avoiding unnecessary spending on IT services.
Fintech company
Yedpay migrated their workload to the cloud after experiencing a data centre issue, and as a result, their IT services costs were reduced by 40%.
4. Speed
With increased accessibility, mobility, and agility, cloud migration speeds up product/service-to-market processes. If your organisation is increasing in popularity and a product or service is more in demand, the cloud will facilitate the implementation
and deployment of said product or service by providing companies with effective and speedy technology.
The Australian Monash
University’s transfer to the cloud reduced their time to provision environments from months to minutes and cut storage costs down 25%. The university used NetApp and Kumolus to transfer all data including student experiences, heating and cooling, class
scheduling, and everything else onto the cloud, and have since been operating on a much higher level.
5. AI technology
Cloud migrations allow companies to become more scalable and open to innovation by facilitating the integration of artificial intelligence technologies.
Increasing numbers of financial institutions are becoming reliant on AI and machine learning tech that can be easily and speedily processed over the cloud.
According to
Deloitte, a client based in China operating in the dairy industry required an update to their digital intelligence strategies in order to optimise operations. After transitioning to the cloud, this client was able to harness the insights gathered by cloud
technologies and data integration to identify significant issues and solve them to grow their business.
6. Secure operations
As more and more financial institutions move their operations online during the process of digital transformation, cybersecurity has become increasingly sophisticated. Cloud providers are made to anticipate and prevent common security threats whilst remaining
compliant with new regulations that are being rolled out.
While cloud migration does not guarantee complete security, there are and can be security measures in place, such as multifactor authentication and privileged access management (PAM). Additionally, most cloud systems have some level of encryption and there
are recovery plans in case of human error.
7. Less energy consumption
Cloud storage providers scale both vertically and horizontally, which means that they can compute with more memory and upgrade servers according to the changing needs of your organisation. By using hardware and memory more efficiently, cloud computing reduces
energy consumption while maximising performance.
Integrated services provider
Cordant used Cloud Volumes ONTAP and Amazon Web Services migration to create a hybrid cloud infrastructure suited to their business, which significantly reduced the company’s data storage footprint.
Some individual cloud providers have set goals for lower carbon use on the cloud. For example,
Google has set the goal to make the running all of their data centres with ‘carbon-free’ energy by 2030.
Transitioning to the cloud can offer financial institutions tremendous opportunities to scale-up and innovate.
While the initial decision to migrate to the cloud can be a daunting process for businesses used to traditional methods of data storage and online operations, the benefits for interaction, speed, cost, and many other factors are significant benefits which
outweigh the initial costs.
For more information and to register for this Finextra’s Financial Cloud Summit 2023, please visit the event page here.