For years, cloud computing received a lukewarm reception from IT professionals in the financial services industry. However, opinions about the cloud are starting to change. According to research by Ovum, improved security features offered by cloud service providers (CSPs) have led to an increase in cloud adoption in the capital markets within the last few years. Ovum also predicts that financial institutions will adopt cloud computing services as a faster clip in the future.
“The capital markets are set to increase investment in cloud services, continuing the trend of technology adoption in the industry, according to Ovum. New research from the global analysts indicates that due to improvements in cloud security and a wider variety of applications, investment in cloud, by both the buy side and the sell side, is set for further growth.”
While the Ovum research illustrates the increased acceptance of cloud computing among financial services firms, there are factors to consider before migrating to a cloud environment. These include current and future business processes, data management and data analytics strategies, and regulatory and privacy issues – both on a national and international level.
Key Business Drivers for Adopting Cloud Computing
The use of cloud-based resources is still new for most financial services firms. However, many firms are adopting cloud computing solutions in order to realize cost savings, time-to-market advantages, and the ability to change IT quickly around new business requirements.
Shifting financial markets require financial institutions to anticipate opportunities and obstacles – and respond quickly to both. Cloud computing solutions enable organizations to move swiftly into new markets, adapt core business processes around new business opportunities in less time, and facilitate business growth through acquisition.
Expansion and upgrades
The process of planning for and submitting detailed requests for additional hardware, software and data center space can often impede progress on building new and improved financial systems. Cloud computing allows organizations to circumvent those issues by going directly to the cloud provider for all the required infrastructure resources.
In light of the recent cyberattack on JPMorgan Chase, it’s no surprise that financial institutions are approaching the cloud cautiously. However, many cloud providers, including HOSTING, offer secure, compliant cloud environments on both public and private clouds that are often more “bullet-proof” than those found in organizations’ internal IT environments.
Compliance issues and the cloud
Regulated financial services firms that are thinking about implementing a cloud computing solution need to ask potential CSPs the ways in which they address the following issues.
As we discussed in our recent blog, Financial Institutions Face Challenges with Cyber Security, financial services firms face intense scrutiny about their security and compliance postures. Therefore, it behooves them to partner with a CSP such as HOSTING that offers secure, compliant cloud environments that meet the rigorous regulations of PCI and SOX.
Join HOSTING Chief Information Security Officer (CISO) Johan Hybinette on Thursday, March 19th, at 3:00 pm Eastern Time for his webinar, The Changing Compliance Landscape. Johan will share how financial services firms can benefit from utilizing HOSTING Managed Compliance Services, and offer tips for selecting the right security and compliance solutions for your business.