The case for Cloud migration in financial services
Historically, cloud-migration is a concept that has sat uncomfortably with financial service providers. Even today, 15-years or so years after cloud-computing became available, lingering concerns remain.
Yet, , much of the technology underpinning today’s banking systems is founded on outdated architecture and monolithic applications that are proving too costly and complex to change.
Consequently, system changes are inherently unreliable, and all too often, well intended enhancements leave customers unable to access their money. Cloud technology offers a way out of this bedlam while also offering additional benefits including increased business agility and lower operating costs.
So why aren’t more decision-makers in financial services organisations choosing to migrate their systems to the cloud? The answer is that several unfortunate, yet popular, misconceptions about migration are deterring them by making it seem like an excessively risky choice.
Some of the most prevalent misconceptions include:
(In)security: Information security remains the number one concern - and rightly so. Concerns about who can access information on the cloud and indeed, who might steal it, are however unwarranted. When correctly deployed, cloud applications are no less secure than traditional in-house deployment options. Leading cloud service providers recognise that security is central to their success and have dedicated significant resources into the delivery of iron-clad security.
Migration means service disruption: Again, this is not necessarily true. With the right planning, a strategic cloud-migration does not require a disruption to your business services. It can be carried out seamlessly and in the background alongside your existing legacy infrastructure without affecting your day-to-day operations.
It’s all or nothing: Migrating to the cloud does not have to be all-consuming; many companies choose to operate a hybrid model, so the cloud-environment works adjacent to existing infrastructure. about how this can be managed. Leading organisations are also embracing the hybrid model to deploy cloud-based innovation sandboxes to rapidly validate the consumers’ acceptance of new services without disrupting their existing business. Size isn’t everything: There is a perception that cloud-computing only works for large organisations. The truth is that the cloud is considerably more scalable and elastic than hosting in-house and therefore suits any size of organisation. You only pay for what you need – you can quickly up or downscale depending on those needs as and when they change. Obviously, there are significant scalability advantages if your application is truly cloud-native and well containerised rather than simply deploying a monolithic application using virtual machine technologies.
While this list is not extensive, hopefully, it illustrates that cloud migration is both a feasible and positive option. Importantly it gives financial institutions some much-needed room for innovation and clear cost savings.
Happily, there are growing signs that the true value of the cloud for financial services is now being recognised. The ATMIA’s Next Generation ATM initiative is a great example. Traditionally, the proprietary nature of the ATM channel has stifled the market’s ability to bring new functionality to consumers. Arguably, this lack of development is why many consumers – for the time being anyway - see ATMs as nothing but cash dispensers. The ATMIA’s Next Gen ATM blueprint rightly places a significant emphasis on cloud applications as the foundation for new innovation and cost efficiencies.
With the right investment and level of vision, ATMs could be as convenient as walking into an actual bank branch. With branch numbers on the decline, particularly in more remote areas, it would be pragmatic for banks to think about how they plan to continue to offer a good service to customers in these areas by embracing a cloud-centric strategy.