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Debunking Cloud Myths: Not All FS Do Cloud the Same Way


Financial services firms introducing cloud technology can follow the exact same model as other firms and even deploy a pre-set “product” used by others in the industry.


One of the first questions many financial services firms ask after they decide to implement cloud technology is something along the lines of: “How does competitor X do it? We’ll follow that model.” The answer is that there’s is no one-size-fits-all approach in the cloud.  And the fact that there is no customized “product” solution that meets most of their needs often comes as a surprise.

Your Business is Unique

So why can’t all financial services companies do cloud the same way? There are simply too many variations for it to make sense. When you take into account things like different product specialties, regional coverage, sales processes, corporate strategies and compliance rules (as interpreted by the compliance department and dependent on how conservative a firm is), the notion of using the same exact model in each firm becomes nearly impossible to deliver.

For example, within the wealth management space there are big differences in how companies use CRM depending on whether or not they target the mass affluent, high-net worth or ultra high-net worth. This difference in targets has a significant impact on how firms approach things like householding (e.g. items that roll up to a household are more sophisticated with the upper market in terms of legal entities, philanthropic endeavors, etc.) and marketing (e.g. targeting ultra high-net worth individuals via email marketing is a waste of time).

The asset management space is another great example of how different one firm can be from the next. In this arena, the type of client with whom you speak makes a big difference in the type of data and information you should share. For instance, the information that a broker or dealer may need will be very different than what an RIA needs.

As a result of difference like these, what works for one firm won’t necessarily make sense for another. Thus, each firm’s cloud solution needs to be built around its own unique nuances.

Don’t Be Fooled By Companies Who Tell You Otherwise

But what about those traditional back-office system companies that offer “cloud connectors” to popular cloud platforms? While many firms assume that these companies must have it figured out so it’s wise to follow their model, the reality is that product companies like these have very little cloud experience and their priority is to sell more of their own product, not architect in the best possible manner.

As a result of this priority, these companies generally decide how to connect based on factors like percentage of market demand, time to market and ease of development. In cases like these, early versions are often lowest common denominator approaches that don’t scale well beyond the smallest businesses. Additionally, these models often change once the company realizes that larger and more diverse firms can’t use the initial model. It’s also important to note that, even when comparing the models of the connectors for direct competitors for certain types of data, you will find some drastic differences in approach.

Pay Attention to Others, But Go Your Own Way

So what should you do? You shouldn’t completely write off what other financial services firms are doing, you just need to keep in mind that your cloud model won’t be exactly the same as theirs. Sometimes you need to think like a non-financial services company would think in order to avoid some of the historical biases that have built up over time.

Start by researching and understanding the common approaches among firms like yours, though remember that there isn’t always a “best practice.” Additionally, take the time to understand the pros and cons as well as the implications of each approach.

Ultimately, it’s most helpful to use an integrator who has done implementations before and has a proven point of view. But remember: be wary of those who say “it’s only one way and we have a single answer.”



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