Moving to the cloud has unmistakable advantages for many businesses, including better security, increased flexibility, and cost savings. However, many sensitive industries – such as financial institutions – have been slower to make the transition for myriad reasons.
Financial institutions are among those moving to the cloud, even though the pace is slower. While about 25% of the workload across industries utilizes the cloud, only 16% of the financial industry has moved to the cloud. What are some of the issues that are holding them back, and are those concerns unfounded?
One reason for possible reluctance to embrace cloud technology is an unfounded fear that intense competition and increased governmental regulations will hamper business efforts. In reality, cloud technology gives financial organizations the ability to innovate and grow much more quickly than possible with traditional IT solutions.
Since they can benefit tremendously from moving to the cloud, how should banks and other financial institutions proceed to do so? We’ve highlighted several cloud migration strategies that are particularly well suited for banks and financial services. By pursuing the proper strategy, financial institutions can reduce costs, provide a better customer experience, and ultimately transform the way in which they do business.
An Increasing Market and Waning Hesitancy for Financial Institutions
Cloud adoption among Canadian companies is on an upward trajectory and shows no sign of slowing. A recent report by the International Data Corporation (IDC) predicts that the Canadian Information Communications Technology (ICT) sector will reach $132.6 billion by 2025. Yet many financial institutions remain hesitant to make the jump to migrating their data to the cloud.
One reason for that is security concerns. Any loss of public trust could be devastating for financial institutions, which also must navigate strict compliance and regulatory standards.
With those pressing concerns weighing on their minds, some organizational leaders worry about how safe their sensitive data will be in the cloud.
What many don’t realize is that the cloud is often far more secure than physical servers and data centers. Those who do understand this new reality are jumping on board in ever-increasing numbers.
Benefit 1 – Increased Security
How can cloud services be more secure than physical servers? It’s because they were designed from the ground up with compliance in mind to meet the highest possible security standards. As just one example, Microsoft offers security tools designed for financial organizations that can help them meet industry-specific regulatory requirements. That’s far better than security tools that are patched onto existing IT networks, potentially creating security gaps that are vulnerable to exploitation.
In short, financial organizations can be assured that their data is safe in the cloud – and most likely much safer than it was before.
Benefit 2 – Improved Scalability and Added Flexibility
In the past, financial institutions had to rely on physical servers that often had limited storage. That limitation evaporates in the cloud, which removes limits by allowing organizations to leverage on-demand capacity.
That means that seasonal changes in traffic are no longer a cause for concern – and lulls do not cause wasted capital expenditures. Organizations are free to use what they need, when they need it, without being limited by capacity.
Benefit 3 – Reduced Costs
It makes sense that as scalability improves and capacity flexes effortlessly, cost savings will naturally follow. Since organizations only pay for what they use in the cloud, they never have to deal with the issue of paying for unused capacity on physical hardware. For financial institutions that are focused heavily on bottom-line ROI, this benefit is particularly attractive.
Benefit 4 – Better Offerings and Improved Customer Experience
What could your team envision to improve your customers’ lives if they had no limits? Thanks to cloud technology, the limitations of legacy hardware are a thing of the past. New and innovative products and applications can be uploaded online as quickly as your team can envision them, instead of slowly being rolled out across your organization.
Did your competitor launch a product that requires a response? Your team can create and deliver an innovative offering far more quickly thanks to the cloud. Wondering how to capture customer behavior and feedback? Improved data processing capabilities mean that your team can design products based on what your customers actually want – and use.
Cloud Migration Strategies for Financial Services
With so many benefits that would allow them to innovate and scale, why do some financial organizations hesitate to transition to cloud banking? While many want to be free of the limitations of legacy systems, migrating to the cloud can be an intimidating endeavor.
Working with an experienced organization (like Dyrand Systems) and following established best practices can eliminate worries and make the transition as smooth as possible for both employees and customers.
Just like any new business process implementation, a successful cloud migration requires strategic planning. The steps below will help smooth implementation.
Audit What You Have
The first step to any successful change process is determining where you are starting from. Conduct an audit of your current systems to see where you are. This is a particularly critical step for financial organizations that have to meet strict compliance standards. You may discover that some applications you have in place are more suitable than others for the cloud.
This will help develop a plan that takes into account what you have now, what your team requires to function well, and what customers want and need.
Secure IT Expertise
Cloud migration does require specialized knowledge. Most financial organizations probably don’t have an experienced IT team or employee on staff to coordinate a migration of this magnitude. To smooth the transition, organizations should not hesitate to bring in additional help. Some organizations choose to hire someone internally while others choose to outsource. Either way, the most critical thing is to have someone with the skills and knowledge to properly plan, execute and follow up after the transition.
Also, be cognizant of the fact that financial organizations store extremely sensitive data. That necessitates that data integrity is maintained during migration. A skilled technical team will know how to accomplish this to prevent data loss while ensuring that processes are set up correctly and preserved in the cloud.
Protect Your Data
It’s a common-sense best practice for organizations to back up all data before migrating to the cloud to mitigate any risk of data corruption or data loss. No organization wants to hear that their data has been compromised, but it’s particularly devastating for a financial institution dependent on public trust. A backup ensures that an organization is protected if the unthinkable happens.
Maintain the System
Proper cloud maintenance doesn’t end with migration, in fact, that’s only the starting point. An organization’s new system must be monitored and managed by IT experts. Putting that team in place beforehand to provide support will greatly enhance the potential and efficiency of the new systems.
Technology problems don’t evaporate with a move to the cloud. Experienced IT support can help ensure that technology issues don’t result in loss of time or resources.
Financial Organizations Thrive in the Cloud
The benefits of the cloud simply add up for financial organizations, and as more businesses adopt the cloud, those who don’t will fall behind.
if you are thinking about moving to the cloud, now is definitely the time to act. The cloud allows you to offer better products faster, which increases ROI, improves customer experiences, and increases the potential to grow your business.
If you are looking for more information on migrating to the cloud and need a team of IT experts to help you get there, reach out to Dyrand Systems, Canada’s premier private cloud expert. As a Microsoft Direct Bill Partner and provider of Microsoft Azure Services, we customize our cloud offerings for each business we serve. We know it’s critical that your financial institution has the right solution to fit your needs, not the solution that fits your service provider. Contact us today.
- 1 An Increasing Market and Waning Hesitancy for Financial Institutions
- 2 Benefit 1 – Increased Security
- 3 Benefit 2 – Improved Scalability and Added Flexibility
- 4 Benefit 3 – Reduced Costs
- 5 Benefit 4 – Better Offerings and Improved Customer Experience
- 6 Cloud Migration Strategies for Financial Services
- 7 Audit What You Have
- 8 Secure IT Expertise
- 9 Protect Your Data
- 10 Maintain the System
- 11 Financial Organizations Thrive in the Cloud