I was listening to some music from my youth - Little Fluffy Clouds - The Orb - whilst watching the thunder clouds gather outside of my office. We all know that clouds live in the sky, these amorphous collections of water droplets high above our heads, drifting from location to location, with no intervention from us on the ground.

To a great extent, this is the promise of cloud computing - a vague notion that some processing and data storage is taking place somewhere; you just interact with it and trust that it is there.

Of course, this isn't quite true. In the computing world, the "cloud" has to touch the ground somewhere, and for financial services that location is rather important.

Unlike nebulous entities such as Facebook, where it feels like we sign our rights away to all of our personal data, banks have to be somewhat more cautious. As an individual, you might not care geographically where Facebook is holding your data - after all you are volunteering to "share" that information with others. Your financial information though - which in itself can provide a deep profile of you as an individual: your identity, your habits, your earnings - should be as protected as gold bullion in Fort Knox

As an institution, you also have to ask to whose laws, regulatory authorities and data protection principles do you want to expose your data (nay, your customers' data)? Ground zero, if you will, must not expose you unnecessarily.

You also have to ask to what extent your cloud provider can truly commit to any service level agreements. If your cloud was to evaporate, how quickly could it be re-instated, and what level of data consistency could be guaranteed. The cloud is not impervious to such outages - both Amazon's AWS and Microsoft's Azure have suffered failures, leaving their customers drifting for hours. Whilst service is being restored, are you able to get your service prioritised (or are you forced to wait for general availability of your vendor's cloud, before your services can be accessed), and what other companies are you competing with for vendor resource and assistance? Unlike "in-house" disaster recovery, with the cloud you are completely reliant upon third-parties.

Steve Wosniak, the co-founder of Apple, has just made some disparaging remarks about the cloud, suggesting that "there are going to be a lot of horrible problems in the next five years". If you treat the cloud as some panacea, that may be true. Treat it as another weapon in your arsenal of systems delivery, choosing what you decide to place in the cloud with care, and how you place it there, could see you reaping the benefits.