For the regular fans of Countryfile that caught the autumn episode on the mating habits of deers, you’ll know that it is peak season. While the links between deer and the financial sector may not initially seem obvious, there are many parallels between this
season and the ongoing battle between the established alphas of banking and insurance, and the disruptive young bucks (such as Apple Pay and Metro Bank) – all of whom are vying for the attention of the increasingly selective consumer.
Much like male deer, to be competitive a financial services organisation must prove it is more reliable, has stronger stock and can provide the best possible experience for its followers– all while learning how to adapt, evolve and innovate according to
rapidly changing internal and external demands. Cloud computing provides many with the foundation to do so, enabling them to expand their consumer offering faster and more cost-efficiently, leading to quicker return on investment and competitive advantage.
And because cloud systems are continually evolving to provide greater value and capabilities, including predictive analytics, the potential to develop innovative services is virtually unlimited.
It’s no surprise then that financial service companies are starting to embrace the cloud in a more profound and comprehensive way than before: a global study from the Cloud Security Alliance shows that 61% are in the throes of hammering out their cloud strategy,
with between 39% and 47% looking to use a mix of in-house IT, private, public or hybrid off-premise environments. But with a shift to the cloud, comes a different set of challenges….
Balancing the old with the new
Ultimately it’s the fastest and strongest with the most impressive offering that will win the consumer and favour of the masses. And unlike their new, and far more agile, disruptive counterparts, traditional financial service organisations are often slowed
down by the legacy systems which underpin their core foundations. The majority of budget and resources is also often already committed to these older systems – just to keep the lights on. While the basics are important, established players need to ensure they
are allocating enough resources to more strategic cloud investments to support the businesses overall strategy; and consider how these will work alongside existing solutions.
Managing multiple providers
Just as grazing from a single patch of grass can leave a deer hungry, using a single IT provider can leave your infrastructure vulnerable. However, a multi-vendor plan requires a more complex management strategy. That’s not to say it has to be a disaster,
organisations just need to be strategic about which data and applications they host in which environments. For example, a bank may keep certain data sets in a regionally-based data centre to meet data sovereignty requirements, while the rest of their data
can be stored in a more generic (and less expensive) cloud storage facility. Data mobility, control and orchestration is key to this.
Compliance, compliance, compliance
Despite its obvious benefits, one of the biggest blockers to banks adopting the cloud, particularly public, remain worries about regulatory compliance. To be precise, reputational cost to the organisation (59%), financial damage (54%) and loss of data (51%),
top list of perceived concerns if public cloud suffers a breach. Banks historically perceive heightened risk by entrusting their data to a third party; they need a cloud computing platform designed for regulatory compliance to help them adapt their systems
to compete more nimbly against start-ups while mitigating risk. Solutions are available which include seamless hybrid technology that permits financial institutions to keep sensitive data in on-premises systems while leveraging insights and analysis across
Uncovering the clandestine cloud culture
The much publicised and widely-accepted benefits of cloud mean that many people outside of IT are taking executive decisions to start using applications in the cloud to get their jobs done faster, cheaper and more efficiently. This could be something as
seemingly innocuous as the marketing department using a cloud-based file sharing service, like DropBox, to send large files. However this clandestine cloud culture opens up organisations to security, data management and compliance vulnerabilities. And with
majority (92 percent) of UK Financial Services line of business managers (not in IT) saying they use some form of public cloud, whether validated by IT or not, according to EMC, VCE and VMware research – it’s a big problem. IT departments must have a strategy
that gives easier access to cloud services in a controlled and compliant manner.
Investing the appropriate skills
None of the above is of course possible without the right skilled professionals to make it happen. Worryingly,
CompTIA’s Annual Cloud report shows a global human capital challenge to meet the rising demand for cloud services. The FSI customers we speak to in our
IT Transformation Workshops echo this sentiment, with 78% saying they aren’t mature enough to be able proactively predict serviceability issues as customers require. Hiring in-house cloud experts from the limited pool of professionals in the market is one
solution, training existing staff is another and partnering with external cloud consultants is a cost-effective third.
While these challenges may seem daunting, the financial services industry must commit to addressing them head on, and fast if they are to stand a chance against the young bucks disrupting their business models. Hindering the use of cloud will slow the pace
of digital innovation and prevent businesses from working as efficiently as possible. If your eyes are open to balancing the old with the new, managing multiple providers, compliance, clandestine cloud and investing in skills, there’s no reason why you can’t
win the affections of the consumer market.