The Reality of the Cloud for Financial Services – Part 1
According to a report from Markets and Markets, the financial services cloud market is set to reach a total market of $29.47 billion by 2021, growing 24.4 percent.
The study further found that most of this growth will be right here in North America. At the forefront of this trend, Capital One has made public declarations around their all-in cloud, all AWS strategy. Their significant presence on the expo floor at AWS re:Invent was further evidence of this commitment. The growth of cloud adoption in this sector is driven by a simple truth: Financial services are being transformed by the cloud.
Still, some Financial Services companies struggle with the challenge presented by the maze of legacy services built up over decades of mergers and acquisitions. It’s all too common for financial services organizations to still be using IBM mainframes from the 1960s alongside newer technologies. This can make the prospect of cloud transformation seem daunting, to say the least.
However, the question is not if your organization will transition to the cloud, but when. Cloud transformation benefits greatly outweigh the risks — and your competitors are already moving. The longer you wait, the further behind you fall.
Benefits of Cloud Migrations from Legacy Solutions
There are specific benefits to financial services organizations migrating legacy environments to the cloud:
- Efficiency: A cloud migration offers opportunity for increased efficiency at decreased operational costs. For financial services organizations looking to revolutionize their IT procurement model, a cloud migration from legacy environments is a quick and easy win, opening the door to more modern tools and services.
- Decreased Storage Costs: The regulatory requirements for data retention can create enormous costs for financial services. Moving to AWS cloud storage solutions can significantly reduce costs, while still meeting stringent data security requirements. A well architected cloud storage solution will meet your needs for virtually unlimited scalability while improving cost transparency and predictability.
- Increased Agility: To improve their competitive edge, Financial Services organizations are seeking ways to become more agile. A well-planned cloud transformation will result in applications and platforms that effortlessly scale up and down to meet both internal and customer-facing needs. What’s more, a successful cloud transformation means access to new and better tools and advanced resources.
- Improved Security: Cloud solutions offer access to enterprise-level equipment and the security that comes along with that. This is normally only within the budget of very large organizations. Cloud services provide increased redundancy of data, even across wide geographical areas. They also offer built-in malware protection and best-in-class encryption capabilities.
In my next post, we’ll discuss the “culture transformation” that will enable Financial Services to maximize the return on their cloud transformation investment.
Robb Allen is the CEO of Effectual, Inc.