Cloud computing; while sometimes compared with the virtualization of computing applications, power, and storage that deploys “pay-as-you-go” web services, the characteristics of this emerging model have made it much more than a buzzword in technology circles today.
Despite its immaturity and potential integration challenges, cloud-based technology offers a range of business benefits; specific to the finance industry.
These advantages include:
- Cost Savings
- Usage-based Billing
- Business Continuity
- Green IT
- and more
In this article, we will outline the characteristics of cloud computing, and further discuss the factors that had made it an attractive opportunity for financial service firms.
Characteristics of Cloud Computing
While cloud computing can be deployed through various delivery models, including SaaS, PaaS, IaaS, DaaS, and BPaaS, it’s key characteristics remain constant through all models, and include:
- On-Demand Self-Service: Cloud computing enables users to unilaterally provision computing resources, such as server time, power, storage, network bandwidth, and software in a straightforward, hands-off, and flexible way. Eliminating the human interaction with service providers, on-demand self-service enables users to scale the required infrastructure without disrupting host operations.
- Ubiquitous Network Access: In contrast to desktop computing, the cloud offers broad network access to systems regardless of user location or device (Tablets, PCs, Macs, mobile phones, etc.).
- Resource Pooling: Through the scalable, multi-tenant systems involved in cloud computing, providers can service multiple clients and customers with various physical and virtual resources that are assigned and customized per user demand/needs.
- Rapid Elasticity: Elastic provisioning allows users to provide scalable resources/services in real-time.
- Pay-per-Use: Cloud computing offers capabilities that are charged using a metered, fee-for-service, or advertising based billing model. Paying only for usage time promotes the optimization of resources.
How can financial service firms that rely heavily on IT-enabled services benefit from cloud computing?
Despite some of the risks and challenges attributed to cloud computing integration within the finance sector, (i.e., security, data privacy, compliance, and availability of applications deployed within the cloud) — there is a myriad of critical considerations/advantages that have driven many financial service firms to adopt cloud computing.
- Cost Savings: The agility of a finance or banking business is determined by the cost it incurs. The emergence of on-demand, service-based, and bottom-line oriented cloud computing solutions have encouraged IT departments and business leaders to familiarize themselves with the variety of cloud and resource models marketed by public/private/hybrid cloud vendors.
SafeNet, for example, evaluates business “potential” for cloud application and deployment; identifying and customizing cost-saving opportunities and process improvement possibilities that align with best-fit cloud migration paths.
Concerning the financial sector, imagine an automated billing solution within the cloud; “outsourcing” fee management, commissions, and payouts for trading firms and dealers to the cloud would allow the firm to leverage and reallocate previously “tied-up” resources into more strategic initiatives. Ultimately, third-party cloud computing systems offer business’s higher computational speeds, efficiency, availability, and scalability at a drastically lower cost; eliminating the time and resources spent on extraneous resources and processes.
The average number of daily transactions within financial service firms can stretch into the millions. This ever-increasing, yet not always predictable, volume of transactional data has made cloud computing’s scalability features an attractive aspect for financial firms. Defined in the context of cloud computing, scalability is the ability to handle increasing or diminishing resources to meet business demands as needed. While the cloud’s planned scaling of resources/data adds more value to an organization than traditional IT infrastructure, the masses of data in financial firms are highly sensitive.
Because security and data privacy are still major concerns that have postponed the finance industry’s large-scale adoption of the cloud, it’s vital to evaluate scalability in conjunction with features that measure up to on-premise levels of security. Luckily, the cloud has matured tremendously; privacy concerns have pushed many providers to improve security offerings in their cloud platform, such as data encryption, vulnerability scanning, full reporting on compliance, and intrusion detection. Ultimately, banks who take advantage of the right cloud service provider can now benefit from not only stronger security safeguards, but also can scale up quickly, and safely, in an increasingly regulated environment.
Financial Sector Specifics
The financial sector specifically can reap many benefits by making the switch to cloud computing. Current in-house applications like ERP can be expensive and time-consuming to update, but with clouds, updates are completed within seconds and take no time away from your workers or employees. Moreover, a cloud system can help centralize and unify much of your business. If you’re using more than one ERP already, the cloud can help you bring everything into a single environment that meets any and all compliance guidelines.
Clouds can cut your costs on equipment, space, and the staff that you keep around for your on-site servers as well. Managing all these unneeded resources for something you can get through servers with comparable security levels is just an unnecessary expense.
Benefitting Both Customers and Employees
Cloud computing simplifies and streamlines interactions with customers, and it draws in top young talent to your corporation. Cloud systems help financial institutions to be more transparent, something consumers love to see, and it’s a common and trusted technology that they see their favorite brands and businesses working with, from Netflix to Freshbooks.
Further, cloud computing is a modern and straightforward system on which employees will want to work. It keeps the environment customer-centric and runs smoothly, making your business the place that any top-talent recruit would want to work.
The financial industry has been slow on picking up cloud computing, but as its trustworthiness and effectiveness become more and more apparent, it’s clear that the growing cloud industry will revolutionize the financial sector. It provides all the necessary tools, safety measures, and benefits that businesses are looking for, and it maximizes efficiency and minimizes costs with its reduced need for in-house resources or lengthy updates.
If cloud computing has everything you’re looking for, but you don’t know where to start, that’s okay. SafeNet is a reliable consultant ready to partner with you to guide you through the transition and show you the ropes of cloud computing. Their experts are prepared to answer your questions and help you adopt the system your company needs today.