Important public cloud migration considerations for credit unions

Credit unions are facing an uphill battle against changing member digital experience expectations, accelerated by widespread FinTech adoption. Keeping up with the competition continues to cause most institutions to invest in new digital infrastructures, but many are still uncertain about exactly which of their many applications are ready for the public cloud.

Recent global events have helped to push cloud-based initiatives forward, and there’s seemingly much more to come. Over the next decade, the analyst firm Celent predicts financial services moving toward high-impact cloud utilization, eventually running some 80% of systems in the public cloud.

Though as credit unions advance their cloud strategies, in the next several years, they are advised to learn to walk before they run. Taking these changes slow and steady is recommended to prevent soaring costs, operational disruption, member friction—or increased exposure to cyber risk.

Current Cloud Adoption Trends

As institutions continue to adapt to changing market conditions and transform existing external-facing services, balancing the need for the public cloud with the associated risks can be extremely complicated. A clear strategy to ensure reliable, secure service architectures is key to that balance.

Risk appetites can be slightly different from one credit union to the other, but most take the view that not all applications are ready for the public cloud. Institutions are typically still at the stage of planning carefully and formulating strategies around which critical functions to migrate. For example, in a recent Celent report where a large sample of industry leaders were surveyed, they found cloud-based CRM to be a clear choice for the cloud, while most financial service institutions are currently keeping mission critical systems off the cloud.

Other functions moving to the cloud noted as examples from actual institutions from the above report, included: data analytics, CRM, office apps, and app development. While the consensus for most is to keep critical systems out of the public cloud, it’s not unheard of. Thought Machine, a software company that offers a modern core banking platform in the cloud, has several case studies on their site touting success.

Hybrid Cloud Considerations

Credit unions have important choices to make about the type of cloud structure and the service model to support its applications and data capabilities. With the recent F5 State of Application Strategy survey results showing that 71% of financial services organizations have multi-cloud strategies, effective multi-cloud solutions aren’t just another option, they’re often a best practice.

But more cloud environments also mean more complexity. To help simplify cloud strategies, credit unions can benefit greatly from having a comprehensive set of multi-cloud application services and management tools that remain consistent across clouds. They should consider services that are highly programmable, API-accessible, and can be integrated with existing automation and delivery systems.

Public Cloud Cautions for Credit Unions

The reasons for credit unions to adopt public cloud are increasingly more strategic, with important initiatives, like supporting delivery of digital services, promoting customer engagement, and accessing FinTechs and payment. However, with these persuasions for increased usage of the public cloud, comes new caveats.

Leadership teams should be cautious of how they approach cost efficiency aspirations with the cloud. In 2022, 75% of financial services respondents from the above mentioned F5 survey, claimed to have recently repatriated apps from the public cloud or were planning to do so. This move to bring apps back home is probably being driven as much by cost, control, or flexibility needs as security concerns.

With multi-cloud environments comes a greater cyber-attack surface with less visibility. What’s more, multi-cloud also provides more chances for cloud resource sprawl of forgotten or unmanaged cloud instances holding critical data or authentication keys.

And finally, how much incremental investments are required to set up properly for internal resourcing should be carefully examined. Having funds to support DevOps methodologies and advanced technology architectures are just two examples that carry significant weight.


Learn more about public cloud migrations by downloading this F5 sponsored analyst report from Celent, titled, Supporting Financial Services Innovation On The Public Cloud.

Chad Davis

Chad Davis

Chad Davis is Industry Sr Solutions Marketing Manager, F5 Networks, which is the leader in app security and multi-cloud management. He can be reached at Web: Details