As more businesses move to "the cloud," one sector has generally remained a hold-out – banks. Financial institutions have been slow to rely on third-party cloud services, mainly due to perceived security concerns. Now, this may be changing as data increases
and as managing all of it is put to the test. In anticipation of potentially 500 new rules expected to be enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, institutions may find it nearly impossible to manage the coming onslaught
without some help from the cloud.
An American Banker article from earlier this year,
Cloud-Based Disaster Recovery Is Making Inroads with Banks, chronicled banks’ careful movement toward third-party cloud services to fulfill their disaster recovery technology needs. But disaster recovery is only part of the larger value financial institutions
can realize through cloud services.
Beyond the cost savings and efficiencies, cloud services can also help support an institution’s risk management efforts. When I’m speaking with executives, meeting the new regulatory and compliance requirements is one of their highest priorities. And these
proposed requirements are expected to increase data storage and the management of it. This will, in turn, increase the burden on their staff; when the staff is better suited to being focused on its core business. Cloud services may be considered as these
institutions look to alleviate the time and capital spent on managing and storing enterprise data while also monitoring the legal and compliance requirements associated with it. Most of these executives would rather focus on meeting their fundamental business
objectives, rather than think about how enterprise data will be stored, accessed, maintained or destroyed.
New regulatory demands could put pressure on many organizations’ ability to have access to data in nanoseconds. Alternatively, a secure and reliable cloud provider would be able to store and categorize data so that if faced with an e-Discovery request, that
organization could access that precise e-record quickly and easily.
As American Banker points out, cloud computing is making inroads with banks through disaster recovery technology services. Now is the time for financial institutions to take it a step further, taking a holistic approach to data storage and management. Without
an effective strategy, institutions may find it increasingly difficult to manage the pending requirements from the Dodd-Frank Act. Given the workload, budget and uncertainty, enterprise data management might just be one challenge that banks find is worth outsourcing
to the cloud.