The financial services industry has admittedly been slow to embrace the cloud, which only makes sense given the volume and complexity of the data it handles and the regulatory requirements it must adhere to. After all, financial institutions are custodians of customers’ most valuable digital assets: their wealth and all the sensitive data around it. However, it seems like the time has finally come for the industry to migrate to the cloud en masse. Capital One recently became the first major bank to move to an all-cloud IT environment, and they very likely won’t be the last. Cost reduction and scalability have always been some of the primary benefits of moving to the cloud, and after the last year, it’s getting harder and harder for any organization to ignore those benefits.
Financial services customers are increasing digital, which in turn means CX has never been more important. Connecting securely with third-party apps, such as those for ridesharing, are virtually a necessity. The cloud is able to help financial institutions improve CX rapidly and easily because it allows them to update systems without the costly capital investments that normally hold back projects like this. This has allowed payment technology to modernize faster than ever before. Moving to cloud-native applications means that transaction processing systems can support high volume requests with low latency, making their platforms leaner and nimbler overall.
As in any industry, the human factor can make or break digital transformation and cloud adoption. This means that many internal IT organizations will have to ask themselves questions like: Should we buy new technology or devote internal resources to developing it? When does it make sense to leverage as-a-service solutions? Do we have the people on staff we need to make the changes we want to make? Clearly decisions about applications, subscription services, and so on need to be geared toward creating business value, but it can still be hard to get and maintain internal stakeholder buy-in. It’s important to remember that the road to digital transformation and cloud adoption can be very long, and it will require significant commitment to execute effectively.
Financial services organizations clearly need the very best in terms of security and compliance because of the sensitivity of the data they process, the stringent regulations of the industry, and the constant barrage of security threats. Because control and data protection will always be the primary concern, it will (to a certain extent) continue to act as a hinderance to cloud migration. However, private cloud has helped to ease this transition from the beginning, as public cloud providers worked to increase security and control protocols. Now that the public cloud offers that needed compliance and resiliency, along with extensive cloud-native services, the public cloud has become a truly viable option for financial institutions big and small.
It’s important to remember that moving to the cloud is a gradual process. It is a marathon, not a sprint, and it requires that mindset. Allow things to move in phases, and recognize that it may make sense for some items to not migrate at all, particularly if there is no monetary savings or business value to be gained by moving. It may be helpful to prioritize migration phases by whether they’ll save your organization money, generate additional revenue, or both. Customer-centric applications that quickly benefit from the speed, flexibility, efficiency, and constant innovation of the cloud should always receive top priority.