I had the privilege to sit down with two industry leading CEOs and an AWS Enterprise Strategist last week at our CUInsight Cloud Champions CEO event. The conversation raised some powerful new insights from credit union leaders.
Driven by fintech competition and the challenges of COVID-19, the credit union industry is seeing a trend among executives who are becoming less curious and more committed to exploring the adoption of secure cloud technologies. There is a shift towards agile cloud adoption especially as executives discover the cost benefits through a reduction in maintenance expenses and a faster time to market for new applications and services for members.
As cyber attacks and ransomware become daily events, and members demand more digital banking experiences, credit unions can no longer afford to focus resources on sustaining legacy infrastructure and the expense to build and maintain on-premise datacenters. There is greater recognition that the risks associated with not being in the cloud far outweigh the risks of being in the cloud.
What are some common challenges among credit unions that are driving a cloud-first strategy?
- Infrastructure is at the end of its life and needs replacing
- No accurate inventory and monitoring of technologies and servers in use
- Budget prohibitive to hire internal talent to effectively build, manage and maintain infrastructure and ever-changing security challenges
- Increased need for resiliency and secure Disaster Recovery (DR) platforms
What are some of the benefits credit unions experience with a cloud-first strategy?
- Internal IT teams can now focus on making their core applications more efficient and effective for members
- Decrease in time to market – the cloud provides the opportunity to build new infrastructure for new applications and products in astounding time reductions such as 72 hours versus 3-6 months
- Agility to adapt as needed including rapidly transitioning to remote work securely without major operational issues
The credit union industry has been slow to adopt a cloud strategy due mainly to analysis paralysis. Fortunately, there are enough successful case studies from every industry and other banks and credit unions have paved the way, creating best practices for digital transformation to a secure cloud strategy.
Partners who are familiar with the shared security model as well as the credit union industry – what are the regulations, what are examiners looking for, what questions are they asking – can help educate board members and ultimately ensure their buy-in. When credit unions embrace innovation and minimize the cost of failure, they allow for experimentation and iteration to develop solutions to business challenges.
Threats are occurring and changing every day. Legacy equipment drives vulnerability, requiring tremendous resources internally. With the cloud and external partners, credit unions with a cloud-first strategy have instant access to accurate information about servers and data. The cloud allows credit unions to respond quickly and securely to cybersecurity breaches or natural disasters.
With any great innovation also comes great responsibility, and during and after cloud migration credit unions must remain acutely focused on their role as secure custodians of member data. Like any technology, the cloud is a tool and credit unions need to understand where their responsibilities start and end.
The cloud will deliver powerful computing resources, storage, data bases and networking along with hosting locations, DR possibilities and a huge selection of tools and services. The credit union is ultimately responsible for everything else and needs to make sure their teams and vendor partners clearly understand their role and risk exposure so they can secure all aspects of their operations.
A cloud-first strategy can be extremely cost-effective with some organizations reducing infrastructure ownership expenses 30-50%. The cloud offers an economy of scale with providers like AWS sharing the burden to assist with security and compliance, and monitoring for new opportunities, which allows internal credit union IT teams to focus efforts on building new applications and developing new vendor partnerships for which they previously didn’t have the time or budget.
A cloud-first strategy not only allows an organization to scale up to take advantage of new technologies, but also to quickly scale down. If a situation like the COVID-19 pandemic affects an organization’s budget, they can easily scale back to decrease costs by turning off servers or decommissioning test and dev environments.
More and more credit unions are realizing the benefits of a secure cloud strategy:
- Improved collaboration
- More secure remote work capabilities
- Transform internal team focus from infrastructure to building new applications and bringing on new partners
- Ability to jump into new opportunities sooner
- Flexibility to innovate without massive investment into physical infrastructure that can’t be easily eliminated
- Confidence to address future uncertainties whether it’s delivering a new digital experience or responding to a global pandemic
- Reduce threat landscape