Cloud Computing in Financial Sector
Cloud computing is slowly making an impact on the financial sector. Financial stakeholders understand the financial advantages associated with cloud computing. They are wary of the risk related to inefficient management of data assets.
Cloud Computing Can Be Categorized into 4 Models
Public cloud services can be accessed by the client from a third party provider through the internet. However, the client’s data cannot be visible to the public. An access control mechanism is given to the clients. They are flexible and cost effective.
A private cloud delivers several advantages of a public cloud – flexibility and excellent service. It also ensures data and processes are handled effectively in the financial institution. It enhances security.
It is used by a cluster of institutions with common objectives. All the members share the data and application.
It is an interface between a public and private cloud. Information which is not business critical is sent to the public cloud, while sensitive business information is retained in the private cloud.
Some of The Challenges Are:
Handle The Risk – Governance and Compliance
Facilitating compliance with the organization’s policies and anticipating risk would ensure the long term organizational objectives are achieved.
Deliver Efficient Tools
Delivering efficient tools that improve the efficiency of cloud computing and reduce cost is vital for the long term success.
Enhance The Transparency Level
Enhancing the transparency level would establish the trust which is vital for business transactions.
Increase The Existing Security
Financial institutions must seek strict safety standards from the vendors and make sure the latest applications are in sync with tougher security standards.
Ensuring the applications are ready to manage any disaster or unexpected event would boost the overall confidence in the system.
Accomplishing visibility and assessing results are difficult, if it appears mega financial institutions would receive cloud services from many service providers. If they intend to utilize them internally and externally, it would mean the institution must manage various security systems.
Financial institutions must make sure data and applications can be transferred across various cloud surroundings from many providers. It would be advisable to establish a distinct network and a management structure that can function across multiple platforms, both privately and publicly.
The procedures that govern the cloud differ globally, from one nation to another. Several nations data safeguarding laws enforce restraints on data storage, restricting take-up. Hence, the regulation of the cloud is critical.
Cloud computing would enable the financial services firms to reduce investment in specialized hardware, software and human resources. It would be simpler for them to upgrade the existing IT infrastructure. The pay-on-demand model of cloud would ensure, only the services being used would be billed. Overall, there is a significant cost reduction.
It provides the firm, the capability to expeditiously reply to transforming market, customer and technological requirements. It could be scaled upwards/downwards according to the business requirements. This would provide a key competitive advantage.
The organizations within the financial sector would benefit from improved efficiency ratios and operating leverage. The normalization intrinsic in the cloud would simplify the process of unifying advanced technologies and applications in the coming years. Since, technology and processes can be meticulously linked, the cloud provides the financial institution a chance to eliminate intricacy.
Exceptional Client Servicing
It ensures modified and bundled products and services are not difficult to establish, as a stand-alone or sharing method. It removes the supply chain interruptions for the IT infrastructure and services.
The financial institutions would be able to bolster computing capability to be in line with demand pinnacles. They can deliver the advanced treasury solutions without being concerned about the quality of the technology. Corporate clients can access any banking system utilizing any browser from any location at any time.
Financial Institutions Are Seeking the Following Prospects from A Cloud System:
- Robust technology structure to be in sync with the transforming requirements of the business.
- Highly efficient and cost effective infrastructure that is scalable.
- Completely automated service delivery to accomplish dexterity.
- The delivery of shared services throughout reliable domains, ensuring data security.
- The availability of internet centred model utilizing high capability bandwidth and universal connectedness.
- An acquisition model that ensures the institution and the customer can leverage relevant services.
- A reduction in start-up costs and improved competencies that relocate capital expenditures, thereby ensuring the financial institutions can emphasize on business results.
- The capability to provide customized products and services throughout the business operations.
- The use of business model that ensures the financial institution’s expenditure is linked to consumption.
- The establishment of economies of scale would enable the financial institution to outsource various IT competencies.
The business model of financial institutions has changed drastically in the recent past. The interface between business operations and technology has expanded. Financial institutions have the capability to establish a server based application delivery model.