Cloud computing will become increasingly widely used in the financial services industry

When it comes to public cloud, the financial services industry has avoided adoption for years. It’s not that the financial services industry isn’t willing to embrace new technologies. Of course, the financial industry introduced ATMs in 1969 and drove the widespread adoption of mobile payments today.

Financial institutions are understandably cautious about the application of emerging technologies. Financial services are one of the most highly regulated and frequently scrutinized industries when it comes to data privacy and security. There are many regulations it complies with, including Dodd-Frank, FFIEC, PCI DSS, GLBA, SOX, and the USA Patriot Act, not to mention the upcoming GDPR regulations.

With the increase in multi-cloud applications, the financial services industry is gradually beginning to adopt cloud computing. In fact, according to a 2017 survey, 72% of financial executives at U.S. financial institutions said they would use cloud-based solutions in the future or planned to do so, an increase from 62% in the 2016 survey.

Analysts at research firm Gartner said that by 2020, nearly 40% of enterprises will use cloud computing to support more than half of their transaction record systems.

means of survival

More and more financial services companies are adopting cloud computing as a means of survival. Just like companies in other industries, financial services companies must undergo digital transformation if they want to continue to do business better. They must leverage a wide range of data analytics and artificial intelligence tools to help them gather customer insights, drive innovation, and generate new market opportunities.

They must implement on-demand, easy-to-use services to meet their customers' needs. They must change their delivery strategies and customer relationship management approaches to drive customer acquisition and retention. They must use and support productivity, social, collaboration and unified communications tools to enable their employees to work effectively wherever they are and on whatever device they are using.

WORKING IN THE CLOUD

Financial services companies have seen the results and heard praise from IT leaders in other industries, including highly regulated ones like healthcare. They've done some research and know that cloud computing has the necessary controls in place to ensure data integrity, compliance, and availability.

They also realize that cloud computing providers need them to do business in the cloud and are taking extra steps to understand and support their unique needs. Outsourcing infrastructure management to a cloud service provider can help relieve the burden on organizations that must build and maintain their own data centers or provision hardware. Cloud computing solutions can be used to automate human tasks, allowing employees to focus on more value-added tasks.

Response of cloud computing service providers

In recent years, AWS has vigorously promoted its cloud computing services for the financial and insurance industries. Currently, its clients include Capital One, FINRA, Nasdaq, Pacific Life and other financial institutions. Microsoft Azure and Google Cloud Platform are also providing services to some financial services companies.

Cloud service providers (CSPs) now understand the concerns and requirements of these financial institutions and tailor their cloud offerings accordingly.

They invest in leading-edge security and implement data privacy best practices such as file- and volume-level data-at-rest encryption, security key management, and access control. In most cases, they provide a security level of protection that most companies lack the expertise or resources to implement and manage themselves.

Some companies also take extra steps to achieve HIPAA and PCI DSS compliance. Doing so demonstrates that they can meet stringent security requirements, enabling their customers to leverage security protocols to meet their compliance requirements.

The importance of strategy and services

Compared with AWS, Microsoft, Google and other major cloud computing providers, cloud computing service providers (CSP) that cater to mid-market business needs can Provide personalized and attentive services to its customers in the financial services industry, giving users greater peace of mind and achieving return on investment (ROI).

For example, some cloud computing service provider (CSP) engineers do not launch one-size-fits-all cloud services, but strive to understand customers' current IT environments and their short- and long-term goals. This approach enables them to help clients develop IT strategies that consider and optimize current IT investments and legacy systems. It helps these users achieve leaner operations and focus more on their core business, and enables them to leverage technology in the most efficient way while meeting compliance requirements.

TAKE ACTION

Now is the time for financial services industry players to harness the power of cloud computing to make this happen. Today, these companies have greater market opportunities and technological capabilities and will be better equipped to comply with data privacy and security protocols.