Cloud computing has simply brought a huge turn around in the ways by which businesses and other sectors of economy operate. Based on the research conducted by International Data Corporation, it has been estimated that successful and widespread adoption of cloud computing can add around €250 billion to European GDP by 2020. Moreover, as cloud computing is expanding its usage in various sectors it is going to create nearly four million new job thus offering greater opportunities of employment. Also, the way of carrying business and transactions in banking industry can be modernized efficaciously with cloud, but still there are a few concerns that irk.
These concerns are mostly based on security and integrity of data and information in the cloud along with compliance. It is evident that banks, insurance companies and the whole financial sector have been quite slow in the adoption of cloud based services. The banking industry has relied on wait and watch strategy to look on the robustness of cloud infrastructure and how it performs on the parameters of security. Though, the banks have been reluctant in using public cloud in core banking but it can play a great role in banks’ back-office processes that does not involve sharing sensitive data related to customers.
The driving force behind the banks and other financial institutions that is compelling them to adopt the cloud is majorly the industry pressure to reduce IT costs. In fact, the forecasts of Gartner show that by the end of 2016 more than 60% of banks worldwide will process their transactions in the cloud to cope with the poor return on equity. The banking and financial services sector is now looking at cloud in a whole new way as they are taking cues from companies and businesses who have the same requirements of data security and has outperformed competition with lesser costs. The cloud provides flexibility and ease to deploy IT infrastructure unlike the fixed IT systems that banks commonly use. As financial organizations are developing to handle the inflow of data, the data centers have also become more agile to manage the data influx and constant flow of information.
Also, cloud enables banks and financial institutions in transforming their business processes without the need of spending high costs for the physical presence. This can also create new markets and wider service areas for the bank’s customers thereby, giving an opportunity to gain competitive edge over competitors. Banks can also develop new business models that are customer-centric, thereby increasing profitability and growth. From the technical point of view, the cloud automatically configures, assembles and integrates the technology resources to meet transactional goals in financial sectors. As it eliminates the need for IT infrastructure to be installed at every operational point of bank, it makes easier for the bank to deploy services efficiently and at lesser costs. In the near future, the public cloud use is also expected to extend its reach to crucial banking processes like check clearing, credit card processing, data analytics and much more.
Finally, the fact that public cloud is getting more popular among medium and big companies is well known, but I think that some companies like banks, hospitals, life insurance companies should still use traditional storage.