Apr 01 2021

How Banks Can Refine Their Cloud Strategies

Cloud computing is the future of digital financial frameworks, but it demands the right strategy to deliver reliable results.

Financial firms are adopting the cloud. As noted by research firm Deloitte, cloud adoption in the banking industry has increased threefold over the past few years, and many organizations have begun transitioning critical bank systems to the cloud.

For many CTOs, however, historic reticence remains a barrier to effective transformation, with worries around cloud security, sprawl and sustainability frustrating efforts to future-proof key services. The solution: a solid cloud strategy that offers a step-by-step approach to leveraging cloud strengths and avoiding common pitfalls.

Understanding Cloud’s True Risks and Rewards

Current cloud adoption statistics often make it seem as though banks are just now making the shift, but many banks already run all their operations in the cloud. For many financial firms, however, private clouds are the preferred operational approach.

Financial services businesses want more flexibility to manage workloads in a cloudlike way. At the same time, though, they want control over where they place their data and their workloads to ensure they meet ongoing demands for capacity, flexibility and metered service.

Public cloud offerings, meanwhile, come with the potential to expand digital service impact with benefits such as infrastructure automation and improved cost control. And while security and compliance risks are often pegged as the biggest challenges to banking cloud strategy, banks — as heavily regulated organizations that hold onto people’s money — must also be sensitive to the optics of running in the cloud.

These firms are technology-savvy and risk-averse. They recognize the advantages of operating in the cloud but don’t always have an effective cloud strategy. For example, many lack a clear understanding of the interdependencies of the different workloads within their infrastructure. That’s why a carefully built strategy is a vital step for any financial institution seeking to move to — or more deeply into — the cloud. 

The ABCs of Cloud Strategy in Finance

CDW helps a lot of financial services industry organizations with high-level cloud strategy through CDW Digital Velocity Solutions. We tell leaders that to create an effective cloud strategy, it’s best to start with the ABCs:

  • Assess your applications. This includes identifying critical applications and their functions, along with the data sources they use and how they’re connected to other services across the financial IT environment. In many cases, financial firms are best served by contracting with a reputable third-party provider for this assessment process to ensure no applications are missed.
  • Build your adoption framework. Your bank’s adoption framework should allow it to intelligently place services and solutions. This starts by defining key criteria: What specific needs are new cloud deployments meeting? How will they interact with existing services? This step often boils down to creating questions that deliver common answers to ensure C-suite, midlevel management and frontline staff are all on the same page.
  • Curate your service catalog. As many banks move to multicloud environments that combine public and private providers for improved agility and customization, there’s a growing trend toward interoperability: the idea that services and solutions should work equally well no matter their digital destination. By considering workloads based on when, why and how they use protected financial data, it’s possible for banks to strategically curate their service catalogs and ensure the right applications are in the right place for the right reasons. 

MORE FROM BIZTECH: Strategies for securing data through cloud storage encryption.

Playing to Your Strengths

While the commercialization and democratization of cloud technology have lowered the bar for entry, this shift has also changed the face of competition. When everyone has access to the same services at the same price point, technology is no longer the differentiator. Instead, customer service becomes the key to success.

A similar transformation took place in the video streaming business recently. Netflix spent substantial money, time and effort enhancing the consumer experience to maintain its market lead. Likewise, banks can improve the customer experience through delivery of digital assets, better mobile experiences and improved apps.

The hard truth, however, is that most financial services companies aren’t going to be first, as Netflix was. They’re already behind. As a result, they have to differentiate — to find the thing that allows them to be iterative and improve on what they do best.

For tech leaders, this is the forward-thinking component of cloud strategy: the ability to play to your strengths using data-driven insights and agile cloud services to deliver a unique customer experience that sets your firm apart from the competition.

Cloud computing is the future of finance. Effectively making the transition demands a three-part strategy that considers current risks, embraces the ABCs of cloud strategy and taps customer service strengths to stand out from the crowd.

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