Companies are rapidly adopting enterprise-class cloud computing platforms as data storage and security become an increasing priority. One sector that has seen rapid transition to the cloud is the financial services industry. Cloud technology is being used across the entire finance sector, and organizations are particularly favoring private cloud solutions.
Robeco Direct, a Dutch asset management firm that also offers mortgages and saving accounts for retail customers, recently made a total transition to the cloud and moved its entire retail banking platform.
"The motives that drive different institutions to [the] cloud differ," Alastair Brown, RBS's head of e-channels and global transaction banking, told Business Cloud News. "Tier One institutions are very much focused on reducing costs, getting to market faster, whereas Tier Two and Three banks want to roll out services like trade finance that they wouldn't be able to do alone. But if controls on security are breached, you might find the costs far outweigh the benefits."
Private cloud offers greater security
Implementing a private cloud platform enables companies to actively restrict access, both internally and externally. Firewall technologies can also be utilized to put another layer of protection between outside threats and sensitive business data. Dedicated enterprise clouds are particularly beneficial to financial organizations, as they have to consider compliance and security regulations. With a private platform, storage, hardware and network configuration is all dedicated to a single business, greatly reducing the risk of a data breach.
Paul Birken, CTO at process management specialist Capita, told Business Cloud News that while Capita employs a hybrid cloud solution, he believes private clouds are actually cheaper at a certain scale because the increased security they would have to implement with a public platform would eat up any cost savings.
Along with decreasing security costs, private solutions can also reduce in-house IT spending and make business processes more efficient. According to BCN, Commonwealth Bank of Australia has said that, through their partnership with a cloud provider, they were able to reduce maintenance and infrastructure expenditure by 50 percent of total outgoings.
Looking to the future, banks will be able to utilize the security and ease of private cloud platforms to fully benefit from big data analytics.
"We are very slow as an industry to to understand big data," Brown told BCN. "But when we have worked out the best way to use the unstructured data, it will almost certainly be unaffordable to run the algorithms without using cloud capabilities. Cloud is part of the future, it provides a competitive advantage, and it is moving from a buzzword to a real implementation."