Cloud adoption is rising among financial services firms, driven by greater confidence in data security and the potential benefits on costs, business agility, and innovation. We examine the progress of cloud ready data.
- Confidence in cloud adoption is rising as major technology providers expand their services and firms see the cost and innovation benefits.
- Cloud adoption and data security feature strongly in our recent survey, amid efforts by the industry to address fears about data vulnerabilities.
- Once cost and security fears are overcome, the conversation turns to cloud-ready data and the availability of content.
Financial services has turned a corner on public cloud adoption, with those in the industry seeing more benefits than risks when sharing computing resources.
With some of the world’s biggest technology companies offering cloud services for businesses (Microsoft Azure, Amazon Web Services, Google Cloud), the industry has gained confidence.
Trust is growing and as cloud providers expand their services, financial institutions tell me they are scaling-up their activities.
Amid this momentum, what are the remaining concerns of the financial services industry in relation to the cost and security aspects of cloud adoption?
Cost and agility benefits
The biggest single motivation for moving to the cloud is the promise of saved costs.
A firm only has to pay for infrastructure at the point of use and once on-premise systems are shut down, there are additional savings of depreciation and maintenance costs, including power, space, and cooling.
Many of these potential savings are unlocked by the elasticity offered by the cloud, which enables users to move quickly from proof of concepts and short sprints to fully commercialized applications.
Test environments can be created and then torn down in an hour, enabling firms to become more agile and respond more quickly as business requirements evolve.
That same elasticity, if embraced by customers with process and cultural changes, can unlock significant improvement in business agility. It’s much easier to be innovative when you can experiment on demand.
A springboard to innovation
Perhaps for that reason, the cloud is an enabler for new entrants, with smaller companies and fintechs able to set up at a relatively low cost.
The price of failure is lower and it is reassuring for customers that tiny companies stand on the shoulders of cloud provider giants.
For larger companies, migrating the easiest applications first, into the cloud with minimal fuss, will deliver savings fairly quickly and allow lessons to be learned before taking on the more complex items.
Prime candidates are latency-agnostic functions in the middle and back offices, such as compliance reporting.
Despite these benefits, questions around cost always arise in my discussions with customers: Can cost savings really be made and what are the cost differences between cloud and non-cloud delivery?
It may be that firms don’t realize the actual savings to be made until they embark on their cloud journey.
Cloud adoption and data security
The same can be said for data security concerns.
One of the early impediments to cloud adoption was concern over security. In response, providers have made huge efforts to ensure data placed on the cloud is safe.
Still, the issue is a double-edged sword.
Some 82 percent of respondents to our recent survey said that security capabilities were one of the biggest drivers of cloud adoption.
And yet, in the study’s ranking of concerns, security lies second.
Technologists and IT leaders take a more favorable view, whereas those more distant from the technology are less convinced.
Cloud ready data
No matter what the literature says about enhanced security, it feels as though the historical negative perceptions that the cloud leaves data vulnerable can’t be easily overturned.
Recent scandals about data privacy breaches leave a further bad taste and seem to legitimize concerns.
Ultimately, security is a key, and complex, issue. Cloud vendors are strongly incentivised to place real focus here to address customer concerns, and deliver a more secure environment than any individual customer is likely to create on their own. Customers must, however, remain vigilant, and focused on raising the security bar ever higher, rather than seeing this as a ‘free pass’.
Once cost and security challenges are discussed, the conversation with customers turns to data availability: When and what content will be available?
We’re ready when you are
As the industry moves to adopt public cloud, we’re ensuring we’re there for our customers to support them on their cloud journey and make sure they’re prepared for #CloudReadyData.
For instance, our Elektron Data Platform is now delivering it’s award-winning, global real-time exchange, OTC and contributed data via the cloud.
See how Elektron Data platform can connect your enterprise and power your business