Financial firms considering migrating to the cloud are most likely to go for a hybrid solution, according to recent research by the Cloud Security Alliance.
A survey of 102 senior finance executives found 61% are forming a cloud strategy, with 39–47% aiming for a mixture of cloud and in-house IT.
So what’s fuelling the popularity of hybrid cloud, rather than private or public, within the finance sector? Here are 5 Benefits of Hybrid Cloud to Financial Services:
1. Improved security
A hybrid of public and private cloud communicates over an encrypted connection. Traditionally, the cloud provider’s employees would have access to the encryption keys — a glaring security risk. Advances such as split-key encryption leave a “master key” with the business as opposed to the cloud provider. This eliminates the risk of non-business employees being able to access data stored in the cloud.
Alternatively, a hybrid cloud gives companies the option to use on-premises, 100% private, infrastructure. Sensitive data can stay “in-house”, away from the cloud and the public internet. These levels of cloud security can satisfy regulatory, compliance and governance requirements — removing barriers to cloud adoption among the finance sector.
2. Reduced cost
The reduction in expenditure on maintenance and infrastructure is dramatic. After migrating to the cloud, Commonwealth Bank of Australia saved “tens of millions of dollars” in one year and cut down the time needed to deploy a new server from “eight weeks to a few minutes” according to its then-CIO Michael Harte.
Moving to the cloud means it’s the provider’s responsibility to invest in servers and energy bills. No more investing in infrastructure that rarely needs to operate at maximum capacity. Cloud customers only pay for extra resources when their business model demands it (for example, at the end of the financial year or over holiday periods).
3. Minimal disruption
Instead of substantial upgrades (and subsequent patches) to servers and operating systems that involve downtime, cloud solutions offer incremental updates. This ensures staff spend less time learning brand-new systems. No more leaps from one platform to another.
Backup, recovery, security updates, log analytics… all take place in the cloud. Incompatibilities can be identified, rolled back and resolved quickly and easily. IT support teams become free to focus more on strategy and less on troubleshooting individual workstations.
4. Heightened responsiveness
As the explosion in mobile device usage continues, customers are going to demand more services “on-demand”, at their convenience. Cloud-based data centers are dispersed around the world. If there’s an incident that takes a server down, another one takes the lead, with no noticeable impact on customers.
Compare this to servers based 100% on-premises — vulnerable to electrical fault, natural disaster, or sabotage.
5. Increased innovation
Contactless payments, Verisign security, NFC mobile payments… financial companies have to strike a balance between responding to innovations and delivering existing services. Testing, developing and deploying agile solutions can take place in the cloud — there’s no waiting for delivery of the necessary infrastructure.
Day-to-day operations can continue with on-premises security — satisfying customers, regulators and staff.