Cloud Banking: How Can Cloud Migration Transform the Financial Services Industry?
More and more businesses are moving to the cloud every day. With improved flexibility, security, and cost-effectiveness, the benefits are hard to ignore. But some industries are proving slower to catch on. Case in point: financial institutions.
In fact, 43% of banks surveyed by Accenture had little to no cloud strategy in place. The question then becomes, what’s holding them back?
This hesitation to adopt cloud technology is a by-product of intense competition and increasing regulations. But, with cloud technology, financial organizations have the power to innovate and grow at speeds like never before.
So, how can banks and other financial institutions embrace cloud banking? Keep reading to discover cloud migration strategies for banks and other financial services. With the right strategy, financial institutions can cut costs, improve customer experience, and ultimately transform their business.
Adoption of the Cloud Among Financial Institutions
According to a report from MarketsandMarkets, it’s estimated that the finance cloud market will hit $29.47 billion by 2021. Not a small number by any means. Although this shows growth in the number of financial institutions embracing the cloud, many are still hesitant towards migration.
Why are Financial Institutions Hesitant to Move to the Cloud?
One of the key concerns that financial institutions have regarding the cloud is security. With strict regulatory and compliance standards, leaders worry the cloud will fail them. From breaches to insecurities, many just don’t believe sensitive data is safe in the cloud.
It’s understandable that these institutions are hesitant – there’s a lot at stake. On top of regulations, customers trust these organizations with their data. The loss of that trust could have a severe impact on the business.
But the perception that cloud security is not up to par can lead businesses to miss out and fall behind. In fact, the cloud is often more secure than physical servers and data centers.
Benefits of Cloud Banking
When organizations get stuck on security concerns, they have trouble seeing the benefits of cloud banking. But the fact is that cloud technology allows financial institutions to do much more than many understand.
Let’s start by nipping that security concern in the bud. Contrary to popular belief, cloud services are often more secure than physical servers. Designed with compliance in mind, cloud technology often meets the highest security standards. For example, Microsoft Azure offers security tools built for financial organizations. These tools can help organizations meet industry-specific regulatory requirements.
So, financial organizations can rest easy knowing their data is safe in the cloud. Possibly even safer than before.
Improved Flexibility and Scalability
With the power of cloud banking, financial institutions can experience unprecedented flexibility. No more relying on physical servers that have limited storage. Instead, organizations can leverage on-demand capacity.
Leaders won’t need to stay up nights worrying whether their systems can handle seasonal traffic changes. With the cloud, there is no limit on capacity; Organizations can use what they need when they need it.
Bundled with the improved scalability, is the benefit of cost savings. With the cloud, organizations only pay for the capacity they use. There is never unused storage like there often is with physical hardware.
This two-in-one benefit may be the most attractive to many financial organizations. After all, it all comes down to the bottom line.
Enhanced Product Offerings and Customer Experience
With cloud technology, organizations can drive innovative solutions for their customers more effectively. The limits of legacy hardware is a thing of the past. New products and applications can be uploaded online in no time.
This allows organizations to quickly respond to competitor products. Organizations can also use improved data processing to implement new offerings based on customer feedback and behavior.
The benefits of cloud banking speak for themselves. By migrating to the cloud, financial organizations can innovate and grow beyond belief. The limitations of legacy systems no longer hold these businesses back.
But, cloud migration can be an intimidating task. Understanding the best cloud migration strategies can help mitigate this fear. The strategies outlined below will help make the transition as smooth as possible.
Cloud Migration Strategies for Financial Services
Like any business process, cloud migration requires strategic planning. The proper implementation of cloud technology will determine the degree of success of the project.
Audit Your Existing Systems
The first step to strategic cloud migration is, of course, having a strategy in place. Before beginning the cloud migration process, determine the state of your current systems. For financial organizations that have to meet strict compliance standards, this step is crucial.
This will help determine the roadmap for migration. Some existing applications may be more suitable for the cloud than others. With this information, organizations can organize a unique plan to meet their needs.
Secure the Right Knowledge
Unless a financial organization has an experienced IT team or employee, they may not have the knowledge needed for migration. To maintain a smooth and thorough transition, organizations may need to bring in extra help. Some organizations may choose to hire someone internally while others choose to outsource. Either way, it’s important to have someone with the skills and knowledge to do the job.
Because financial organizations store such sensitive data, it’s critical to maintain data integrity during migration. The right technical team will understand how to do this. Not only will it prevent data loss, it will also ensure a business’s processes are set up correctly and preserved in the cloud.
Even with an experienced technical team, organizations should back up all data before moving to the cloud. This will mitigate the risk of data corruption or data loss. No organization wants to hear that their data has been compromised. But, with a good backup in place, this doesn’t have to be the end of the world.
Maintain the System Post-Migration
When considering cloud migration, organizations need to plan for the future as well. Once the migration is completed, the new system will still need to be observed and managed. Having a team in place to provide support will greatly enhance the potential and efficiency of the new system and business.
Technology problems don’t disappear in the cloud. But, with experienced support, these issues don’t have to result in loss of time or resources.
Financial Organizations Take to Cloud Banking
Not only does the cloud offer amazing benefits to financial organizations, but as more businesses adopt the cloud, those who don’t will fall behind.
Thinking about moving to the cloud? Now’s the time. Using the cloud, your organization will be able to offer better products faster. The result of this? Increased ROI, improved customer experiences, and the potential to grow your business.
If you are looking for more information on the cloud, download this case study to see how moving to the cloud helped this organization scale its client-facing app and dramatically reduce data costs.
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