5 Ways Financial Services CIOs are Leveraging Cloud
The Financial Sector’s Foot in the Cloud
In the financial sector, the cloud hasn’t quite become the cure-all IT solution that it has for other industries, but it’s on its way. The initial hesitation makes sense, of course. The financial sector deals with highly sensitive, valuable data, and many people have the misconception that the cloud is unsecure by its very nature. IT outsourcing is also lagging as far as IT trends in the financial industry go, primarily for similar reasons.
Misgivings aside, the industry is beginning to see the value in the cloud, and some organizations are starting to make the move. It’s a good time to do so, given the dominance of digitalization.
According to Peak 10’s Financial Services and IT Study: Tackling the Digital Transformation, 48% of banks are using SaaS for administrative/back office applications.
While businesses may be more comfortable with certain applications in a private environment, when working with the right provider, the public cloud is a cost-effective, scalable, and secure choice for both banks and insurance companies.
5 Ways Financial Services are Leveraging Cloud
So, what are banks and insurance companies using the cloud for? Some organizations are more comfortable with a broader range of use cases than others, but generally speaking, the following applications are most common (and beneficial):
Putting back-office systems into the cloud is a great option for CIOs and IT leaders. The internal management of back-office systems involves a number of tedious activities, however, moving to the cloud eliminates the need to deal with the following:
- Hardware procurement
- Hardware maintenance
- Power and cooling
- Staff utilization for bringing hardware into an environment
Transitioning back-office systems to the cloud is a comfortable way for financial institutions to try out making use of the cloud without feeling like a customer-facing system is being put at risk (although back-office systems are critical). The most common applications moving to the cloud are HR/payroll/time tracking applications, CRM, Office 365 and digital workloads (e.g. website, email, etc.).
Given the rise of customer portals and mobile applications, both banks and insurance companies with a higher comfort level can benefit from using the cloud for customer-facing applications. It’s significantly easier to leave behind the need to worry about scalability and agility by using the cloud than in-house management, which is not as easy or economical to configure in order to accommodate fluctuating traffic.
3 out of 4 financial services institutions offer an online customer portal and more than half offer a mobile app according to Peak 10’s Financial Services and IT Study: Tackling the Digital Transformation.
Policy management systems
The cloud is a practical solution for hosting insurance policy management systems, which hold all critical information: copies of customer policies, new claims, and background checks. HIPAA and PCI-compliant clouds are an ideal choice since policy management systems store such critical information; the supporting infrastructure must be compliant.
Uptime and Disaster Recovery
Companies that are in business to run and manage data centers can typically be trusted to know what to do—data centers are their day-to-day operation. Given that, as far as availability and disaster recovery (DR) go, uptime is built in. Using the cloud for DR purposes is efficient, and typically helps significantly with compliance regulations. Further, many businesses don’t necessarily have facilities that are far enough apart, or equipped with adequate power and cooling, to put a system in them for use in DR. However, doing so in the cloud only requires a business to pay a monthly fee to protect itself from disaster, without the need to buy hardware.
Leveraging external cloud infrastructure to run demanding BI and analytics initiatives.
Digitalization has fast-tracked the use of big data analytics in financial services. Practically immeasurable amounts of data are being generated constantly, born from online portals, mobile apps, and IoT devices. The financial industry knows that such data can be mined and translated into meaningful information that will steer decision making and provide real-time insights into consumer behavioral patterns—but they have to put it somewhere.
The cloud is an ideal solution for properly delivering systems and analysis, as well as enabling data storage, and in a HIPAA and PCI-compliant fashion. The sensitivity of data that’s being collected by banks and insurance companies requires that information is absolutely secure and available, and a cloud designed with security built in can effectively host it.
Further, the resource needs behind analytics initiatives can be demanding, and change quickly. The cloud is a scalable solution for such initiatives, eliminating the problem of resource limitations.
Identifying the Right Applications for Your Organization
Executing on technology requirements specific to the financial industry can be a greater burden than internal resources can manage, which is why working with a reputable provider specialized in the financial industry and cloud is a helpful solution.
If your organization has questions about the cloud and would like to learn more about how it can work for you, Peak 10 cloud experts are here for your team. Contact us today at www.peak10.com/contact-us or (866) 473-2510.