Gartner recently surveyed over 400 global senior financial executives between January and March 2017 and asked about their technology priorities, relationship with IT, and future investments. The survey revealed that by 2020 over a third (36%) of companies will use the cloud to support over half of their transactional systems of record. Further, according to Goldman Sachs, both machine learning and AI will drive $34 — $43B annually of “cost savings and new revenue opportunities” by 2025 across the financial sector. These new technologies will help to optimize trade opportunities, reduce credit risk and lower overall compliance and regulatory costs.
But what do we mean when we say the “cloud?” The cloud, much like the finance industry at times, can seem abstract, as there is often no tangible product. The cloud as we look at it can be public (essentially the Internet – and those providers include AWS, Google, Azure, etc.); private (those cloud architectures typically owned by enterprise clients to leverage the capabilities of the cloud while maintaining control); hybrid (using private for the most part but extending to the public cloud if peak demand requires it); or multi-cloud (today this typically refers to using both an AWS and Azure for example to avoid downtime or data loss). Financial organizations typically use private clouds to ensure security but reap the benefits of the cloud such as flexibility in deploying an application, scalability and provisioning. Working with SoftwareONE many financial organizations are able to avoid purchasing additional servers, networking equipment, and storage and instead focus on developing applications to be deployed to the cloud that helps their clients, their employees and the bottom line of the organization. In addition, the cloud helps to level the playing field for everyone, including the finance industry.
What does the cloud bring to most industries?
The cloud brings to most industries:
- The lack of barriers – globalization becomes more of a realization when infrastructure is no longer an obstacle
- Automation – what you once needed industry expertise for can now be shifted to those more strategic projects while the traditional IT systems can now be monitored via applications
- Cost savings – once you have the tools in place to monitor how the cloud is being utilized it can bring cost savings to nearly every organization. No longer beholden to lengthy contracts you can pay as you go (but monitoring this is a must)
What should organizations be aware of when instituting a cloud strategy?
The cloud is not going away, it is only becoming more prevalent. However, there are factors that organizations need to be aware of when instituting a cloud strategy, including:
- Becoming even more cognizant of security. Whether, private, public or somewhere in between, the cloud needs to be monitored as closely, if not more so, than on-premises. However, the fine line is that one cannot have this security at the expense of the consumer experience. Big banks, hedge funds, and asset management firms, obviously need to secure customer data, but not at the expense of the customer experience.
- Cost – yes, there are cost savings when moving part or all of your IT strategy to the cloud, however, there is also the chance for rogue IT as well. Heads of various departments with a business reason, access to a company credit card and the knowledge to try a certain cloud application to make their life, and their department’s life, easier is not an uncommon scenario. The fine print typically however outlines overages, additional charges, etc. that may not be 100% transparent. The culture needs to remain open so that departments feel new technology is possible if the cost and budget align.
The finance industry is beginning to embrace the cloud and we are all curious to see where such an innovative industry will take the cloud next.