Over the last few years, conversations around cloud computing have shifted from “what?” to “when?” Most companies have come to see the value of operating in the cloud, whether it’s running applications on a third-party server or storing information in a safe place, away from the business’s own out-of-date technology. According to Statista, the global public cloud computing market is expected to expand to $331 billion in 2022, up from $214 billion today.
There is one industry, though, that continues to take a cautious approach to the cloud: financial services. According to a 451 Research survey, only 18% of financial services companies are fully deployed on the cloud, while 70% of respondents said that their cloud projects are only at the initial or testing phases. Many companies are worried about how the cloud might impact security, technical migration, data control and compliance, among other issues.
What many people don’t realize though, is that the cloud is not a be-all-or-end-all technology. In fact, banking executives can implement certain elements of the cloud, while keeping some functions on their company’s own on-premises servers.
Here are some suggestions for going carefully into the cloud.
1. Start Small
There are many ways to try out the cloud without disrupting your business. For instance, we all take email for granted, but it is a cloud-based communications tool. Many companies have also started implementing cloud-based file sharing using such programs as Dropbox or Google Drive, while collaboration tools, like Google Docs or Microsoft One, allow multiple people to work on the same files at once.
A lot of financial institutions still don’t allow these types of basic cloud programs, but if they did, they would quickly see the benefits. According to a Microsoft report, 85% of survey respondents said that collaboration technology has met or exceeded expectations when it comes to accelerated decision making.
2. Try Enterprise Resource Planning Tools
Cloud-based enterprise resource planning (ERP) programs have become much more sophisticated over the years. From customer relationship management (CRM) software to human capital management (HCM) platforms, these tools make it easier for employees to input data and recall client information. They also come with analytical insights that can help executives run a better overall business.
Best of all, you can pick and choose what to use: maybe test out a CRM’s newsletter program to send out communications, or develop a training module through an HCM program that people can access anywhere at any time. Most of these programs can scale up and they also cost less to use than traditional on-prem ERP software.
3. Keep Sensitive Data On-Prem
When it comes to the cloud, it’s security that keeps most financial company executives up at night. Naturally, they don’t want to hand over client data to a third-party company in case that business gets breached. But who says you need to keep it in the cloud?
While third-party cloud companies do tend to have top-notch security, you can easily keep control over your company’s sensitive information. Many businesses have on-prem servers where this type of data is kept. That information can still feed into your cloud-based ERP platforms, while remaining inside your company and away from potentially prying eyes.
4. Say Hello to Hybrid
There’s on-prem, there’s the public cloud and then there’s the private cloud. With the public cloud you’re storing information on a third-party server run by companies like Amazon, Apple and Google. With private, you’re creating a cloud-based server that your company builds and manages. You get the functionality of the cloud – people can access a program from anywhere, and you can quickly deploy software updates across an organization – but you maintain control.
A hybrid cloud is when a company employs both public and private clouds. They might use the public cloud for email and their CRM software, and use private to store data or mission-critical programs. Using both could be a good approach for risk-averse financial operations.
5. Build a Bridge
Another way to go into the cloud without fully adopting it is to work with a company that can connect a bank’s traditional processes with a client’s existing cloud-based programs.
For instance, many companies use cloud-based invoicing software. Typically, when a company wants to pay its vendors through its bank, it has to download an Excel file from the invoicing program and make manual edits to that file before transferring it to the bank via some automated file transfer tool. The bank then returns that file saying 20 payments didn’t go through. The company then has to redo the sheet and upload it again.
Using a service provider such as Fi.Span, which acts as an intermediary between the bank’s software and the client’s cloud program, the customer would download a bank app from their ERP’s app store, select its vendors to pay and then hit a button to send that file off. The company would know in an instant if a vendor was rejected and, if one was, they would fix the problem and re-send the file. In a matter of minutes, all vendors would get paid. Having that middleman lets banks embrace the cloud on their own terms, while improving the client experience.
Clearly, financial companies can adopt this tech at their own pace, but they do need to do something. Otherwise, ignoring the cloud will be bad for business.