Cloud first strategy – The essentials:

Cloud services have transformed the way businesses operate across different sectors. This holds true, especially for the financial sector, where more and more financial service providers are making the transition. As per a recent survey by Celent, over 50% of the global financial institutions say that they expect their system to completely transition to the cloud within 5 years. Post the Covid 19 pandemic, cloud has paved the way for more remote operations within the financial industry, making its adoption more likely in the future.

As the name suggests, ‘Cloud first strategy’ is all about considering cloud-based technology solutions before any other. It allows businesses to save money on software and hardware infrastructure by subscribing to a service provider who can provide the same services at a cheaper cost, and at a premium quality.

As most people might know it, there are three kinds of cloud:

1. Private cloud – operated solely for a credit union
2. Public cloud – shared by several organizations and available to any paying customer
3. Hybrid cloud – combining your private and public cloud functionality to find packages that best suit one’s needs.

IBM has referred to the public cloud phenomenon as “one of the most important shifts in the history of enterprise computing”. It is still a growing sector, as more organizations are becoming familiar with its increasing benefits.

Similarly, while there are credit unions who vouch for the benefits of the public cloud, others are unsure to bring about a complete cloud migration. CSI’s 2021 Banking Priorities Executive Report cites that over 60% bankers did not have the prerequisite information prior to investing in the public cloud. The next section talks in brief about some of the misconceptions associated with public cloud and how credit unions can benefit from the transition.

Misconceptions:

1. The pace of transition: A popular misnomer about the public cloud is that the entire transition has to be made at once. Credit unions are creating a hybrid environment where some of the infrastructure remains on-premise.
2. The fear of ‘all or nothing’ approach: Most bankings services are fearful of making the transition to putting everything on the cloud. The truth is most of their operations such as Office 365 and dropbox are already there.
3. Security breaches: News of security breaches are often making the headlines nowadays. Many credit unions feel that being on the public cloud will make them vulnerable to data breaches. While such breaches do occur, they can be mitigated with proper security configurations.

With an increase in inclination towards adopting a cloud strategy by credit unions, it is important that proper security considerations are kept in mind while partnering with cloud providers. By carefully working with the right provider, businesses can look into the secure configuration of their environments. They can also maximise the cloud’s security and privacy benefits.

Benefits:

1. Compliance – A strong cloud strategy provider ensures compliance with tight security measures, making audits much easier than ever before. Partnering with a public cloud provider entails outsourcing of important compliance related responsibilities. This allows credit unions to utilize a provider’s established framework. Many financial institutions have made large investments in cloud based compliance frameworks. These would have otherwise been highly unaffordable and unsustainable in an onsite infrastructure.
2. Scalability – Physical servers are not compatible with scale. Credit unions therefore must take into account future needs and industry demands. By migrating to the cloud, institutions can bring about greater flexibility, agility and affordability. Migration to the cloud means more resources can be added to their environment while enjoying cost benefits from the process.
3. Cost efficiencies – It is possible to buy only as much physical infrastructure. This leads to wastage and inadequate utilization. With the public cloud, a credit union can customise its purchases and expand its infrastructure only when needed. This leads to potential cost savings and allows credit unions to enjoy the benefits of a managed IT environment.
4. Availability – The public cloud ensures a credit union with a resilient IT environment. It ensures a safety net during server malfunctions resulting in a smooth sailing of operations. It improves the overall day to day experience of both employees and customers, engaged in working with credit unions.
5. Access – In the 21st century and especially in the post pandemic world, timely access to services is everything. Via cloud, credit unions can manage a remote workforce, use an increasing range of high-speed connectivity options, interact with a diverse range of modern cloud based resources and so on. With proper systems, the cloud strategy can transform financial institutions and their private networks.

Final thoughts:

The credit union industry has been slow on the uptake to adopt a cloud strategy due to analysis paralysis. With industry leaders paving the way, more and more people are opting for digital transformation through a secure cloud strategy.

With infrastructure reaching the end of its life, tech inventory mapping becoming challenging. Physical IT infrastructure becomes difficult to build, manage and maintain. With the increasing need to adopt resilient platforms such as Data Recovery, a cloud first strategy is imperative for credit unions.

A cloud strategy can bring down an organization’s costs by 30-50%, primarily by reducing dependency on infrastructure. It also offers an economy of scale by collaborating with cloud providers like AWS on security, compliance and new opportunities. This paves way for credit union IT systems to focus on forging new partnerships and boosting new applications, which they previously did not have the time to do.

Like other businesses, if you too are looking to develop IT Solutions in Financial Services industry, Mindfire Solutions can be your partner of choice. We have gained significant experience over the years working with Fintech Companies. We have a team of highly skilled and certified software professionals, who have developed many custom solutions for our global clients over the years.

Here are a few interesting projects we have done. Click here to know more:

Case study on e-Wallet mobile application.

Test automation of digital payments.

Case study on Smart card for pocket money.