Cloud computing is currently one of the fastest-growing technologies in the world. It is predicted that business applications will soon account for the majority of cloud service spending, with a steady shift from on-premises to cloud-based services, particularly for general business applications such as customer relationship management (CRM) and enterprise resource planning (ERP) (ERP).

Financial institutions are expected to enter the cloud computing market with caution, as there is no one cloud services delivery strategy that will fulfill all their demanding business objectives.

A solution to this problem might be to partner with a strong industry leader in customer engagement platforms like personetics.com, for example. By migrating lower-risk business functions to the cloud financial institutions can benefit from the powerful real estate in the cloud.

Benefits of moving to the cloud

Before migrating to the cloud, financial organizations must examine data confidentiality, security, regulatory compliance, standard compatibility, and service quality of the cloud.

Financial organizations can use cloud computing to convert a high upfront capital expenditure into a smaller, recurring operational cost. There is no need to make significant expenditures on new hardware and software. Furthermore, the distinct nature of cloud computing enables financial institutions to pick and choose the services they demand on a pay-as-you-go basis.

The provider oversees administering the technology in cloud computing. Financial institutions can improve their data protection, fault tolerance, and disaster recovery. Cloud computing also offers greater redundancy and backup at a lesser cost than traditional managed systems.

Because of the flexibility of cloud-based operating models, financial institutions can experience quicker product development cycles. This enables a more rapid and efficient response to the needs of banking consumers. Because the cloud is available on-demand, less infrastructure investment is required, which reduces the initial setup time. Cloud computing also enables new product development to proceed without additional capital expenditure.

Cloud computing enables businesses to move low-key services, such as software patches, maintenance, and other computing difficulties, to the cloud. As a result, institutions can concentrate on their business rather than IT.

Financial institutions have the option of transitioning from a capital-intensive approach to a more flexible business model with lower operational costs. The key to success is choosing the correct cloud services model to meet the needs of the organization.

Various Cloud Service Models to Choose From

Infrastructure-as-a-Service (IaaS)

Instead of buying servers, software, data center space, or network equipment, this cloud model allows organizations to purchase such resources as a fully outsourced service.

Software-as-a-Service (SaaS)

The business software and related data are hosted by a cloud service provider, and users access the program and data via a web browser. Accounting, customer relationship management, corporate resource planning, invoicing, human resource management, content management, and service desk management are examples of software that can be offered in this manner.

Platform-as-a-Service (PaaS)

A cloud service provider provides a complete platform for the development, storage, and testing of applications, interfaces, and databases. This enables enterprises to streamline custom application creation, maintenance, and support, saving IT costs and reducing the requirement for hardware, software, and hosting infrastructures.

Business Process-as-a-Service (BPaaS)

Billing, payroll, and human resources are examples of conventional corporate procedures that could use this cloud model. This model combines all the other service models with process expertise in BPaaS.

 Compliance Risk Involved in Migrating Systems to the Cloud

Many banking regulations mandate that financial data for banking customers be kept in the nation of origin, for example. Certain compliance regulations mandate that personally identifiable data be kept separate from all other data, such as on shared servers or databases. As a result, banks must understand where their data is in the cloud. The confidentiality and security of financial and personal information, as well as mission-critical applications, are crucial. Such a security breach cannot be borne by banks.

Conclusion

When planning future cloud computing projects, financial institutions should select service and delivery models that best meet operational flexibility, cost reductions, and pay-as-you-go models. Customer relationship management and corporate content management are examples of low-risk programs that can be migrated to the cloud with relative safety. Core business functional systems such as wealth management or core banking will however be involved in higher-risk projects.