We find this troubling because the cloud offers financial institutions a way to store the reams of data they hold and to increase their computing power to handle sophisticated programmes such as AI (artificial intelligence) and machine learning to gain a competitive advantage.
By not maximising the opportunities that the cloud offers, firms put themselves at risk of being outflanked by new entrants, suffer higher operating costs, and become less agile due to relying on outdated technology.
So how can financial services firms maximise the cloud’s potential?
In our experience, there are three key decisions you need to make to maximise the cloud; its configuration, how you’ll implement it, and the daily running of it.
Decision 1: Choose your cloud configuration
You will need to select one of the three cloud configurations: private, public, and hybrid. Each has its own pros and cons, which can impact the way firms use the cloud.
- Private clouds are the most secure, as nearly all infrastructure is dedicated to one user and offers the greatest control, security and privacy.
- Public clouds are the most common (and generally most cost-effective), with the infrastructure owned and operated by a cloud provider but shared with multiple users.
- Hybrid clouds try to combine the best of both worlds to allow users to pick and choose which aspects they want from private and public clouds.
Following on from that, you will need to select a vendor, such as Amazon, Google or Microsoft to set up and potentially run your cloud, which will depend on whether you’ve selected a private, public or hybrid cloud.
Decision 2: Select the right implementation strategy
To implement the cloud, you will need to develop an implementation strategy, consisting of server location, use cases and integration with your IT architecture. First is the physical location of the servers used for your cloud – if you’re running a private cloud on your premises, as it is otherwise dictated by the cloud provider. Once the physical location is selected, you will need to determine what you store on and/or use your cloud for and integrate the cloud into your wider IT environment. Due to the immense computing power the cloud offers, it enables you to run programmes that you previously couldn’t. For example, the cloud’s power makes it easier for you to run data analytics (i.e. AI and machine learning) and the cloud’s connection to every user allows you to employ an SaaS model, which will simplify software updates and ensure consistency across the company.
Decision 3: Decide how you will keep your cloud aloft
You will need to consider how you run the cloud on a daily basis. You can either have the cloud provider responsible for the infrastructure, maintenance, and personnel required to run the cloud or do all of that in-house (or somewhere in-between). These decisions will affect the overall cost of the cloud, with outsourcing allowing you to achieve the highest cost savings.
If firms don’t maximise the cloud’s potential, firms risk being left behind by nimble competitors that make the most of the cloud. The cloud paves the way for new insights and offerings to be identified to better meet customer needs with new products and/or services. Without it, firms risk missing out on the future.
An experienced consultancy can make the difference – by understanding not only the target use case but also how to overcome the issues to practical implementation. Sia Partners can support you in maximising the cloud’s potential and navigating the pitfalls.