The financial services industry has long lagged behind other industries’ technology adoption. Leaders often balk at digital transformations over concerns that migrating infrastructure and applications from an on-premises to a cloud environment will introduce new security and data-protection challenges. As a result, 79% of banks are only in the nascent stages of their cloud journey. For industry leaders, such as those helming credit unions, the following tips and tricks can help comprehensively assess the advantages of cloud adoption and jumpstart their transformations.
Offering innovative products and services while keeping personal information safe is a balancing act leaders are weary of disrupting. Still, firms understand the cloud offers undeniable benefits, and many are forging ahead with projects as a result. Ninety-five percent of banking and capital markets executives consider the cloud the cornerstone of digital strategy, and a majority plan to shift at least half of their workloads to the public cloud over the next five years. Industry anecdotes corroborate the story of cloud reluctance dissipating.
Financial services leaders cite increased future revenues, improved future profitability, business and regulatory risk mitigation, expansion, access to real-time data, more accurate services and more integration initiatives that facilitate information flow as reasons to pursue the cloud. Strategically, the move to cloud-based infrastructures supports the shift to remote and hybrid work arrangements.
These are the goals institutional leaders seek to achieve by transforming their infrastructures. The true beauty of the cloud lies in its myriad capabilities, which are the means to profit-driving ends. Cloud infrastructures are extensible foundations financial institutions can mold to suit any company initiative.
For example, distributed teams create new data flows that can send hardware, maintenance and resource costs soaring. The cloud offers a more cost-effective way to adapt to the new era of work, reducing capital expenditures and total cost of ownership. As firms continue their geographic sprawl, the cloud’s subscription-based model enables easy scaling in any direction. Cloud infrastructures enable automatic updates, which reduce downtime and improve reliability, resilience and availability, ensuring business continuity no matter how far away colleagues or customers are. The cloud also introduces the agility needed to rapidly deliver innovative solutions, such as AI-enabled customer experiences.
As infrastructure and data volumes grow, so too do fears of breaches and privacy non-compliance. The cloud has an answer for those concerns, as well. With leading-edge security technologies and best practices, financial services leaders can rest assured data is safeguarded with proper configurations and security measures.
Though the cloud provides these benefits at a typically cost-effective price tag, leaders must still develop new budgets and forecasts. Analysts project cloud spending to grow nearly three times as fast as overall IT budgets in the years to come. Firms would be wise to consider best practices for implementation so as not to incur overruns during their transformations.
Best practices for best results
- Identify business and technical benefits of moving to cloud. Some of these benefits are laid out above, but each firm has its own goals or reasons for considering an infrastructure shift. Understanding why the cloud makes sense is the first step to embarking upon a successful journey.
- Gather analyst and customer testimonial insights about adoption of cloud solutions. Though the industry as a whole may move slowly in its technology adoption, plenty of firms have already completed transformations or begun their research. Learning from their experiences will help pare down choices as the search for appropriate solutions begins.
- Understand the ROI of cloud adoption: calculate cost and resource savings. Firms must mold the cloud to their aims. Modeling costs of migrations relative to existing infrastructure is a crucial step in unlocking the benefits of the cloud.
- Make compliance and security imperatives. The data-privacy regulatory landscape is dynamic. Staying on top of changes to data governance can be a dizzying feat. Following cloud best practice guides from vendors like Azure and AWS will help ensure operational consistency and address compliance requirements.
- Gain support from champions within your organization. It is unlikely that one voice of support for cloud transformation is enough. Those in positions to drive change can seek out other likeminded colleagues to build momentum for cloud adoption.
- Assess the existing environment. Financial institutions considering the cloud must holistically assess their existing application and infrastructure environment. Only through this understanding can they create the roadmap and timeline for the project.
- Involve your employees. Change management will be a guiding force for any migration. Keeping the entire team abreast of developments throughout the transformation will ensure they are equipped with enough knowledge to adapt to the changes.
For intrepid credit unions, a trillion-dollar opportunity awaits
McKinsey expects $1 trillion in additional cloud-propelled run rate to be available to Fortune 500 companies by 2030. Though this research focused on behemoths, credit unions don’t need to be among the industry’s giants to take advantage of this opportunity. It’s clear the cloud can, with appropriate due diligence, provide the foundation firms of any size need to spur growth. In fact, the biggest obstacle to enjoying the potential boon may simply be initiating the transformation strategy. Credit union leaders unsure of how to approach the cloud can consider what is motivating the rest of the industry and keep these best practices in their back pockets. The cloud wave will only continue its momentum; the time to hop aboard is now.