The Financial Services Industry Breaks Through to the Cloud
When it comes to the cloud, banks, insurance companies, wealth management firms, and the like have been a little late to the party. It’s not that the financial services industry isn’t big on adopting new technologies. After all, this is the industry that introduced ATMs back in 1969 and is driving today’s proliferation of mobile payment options.
It’s just that these companies are cautious — and rightly so. They are in one of the most heavily regulated and frequently scrutinized industries, especially when it comes to data privacy and security. The list of regulations is long, and includes Dodd-Frank, FFIEC, PCI DSS, GLBA, SOX, and the USA Patriot Act, among others.
The Cost of Non-compliance
The consequences for non-compliance aren’t cheap or restricted to monetary fines. A company’s share price could be negatively affected, and its reputation damaged. Non-compliant companies could be required to increase capital or liquidity, putting them at a disadvantage to their compliant peers. Company executives could face criminal conviction.
The Issue of Legacy Systems
Some companies have also shied away from the cloud because of investments in on-premise data centers. Even if they could make a strong business case for packing up and moving to the cloud, many would find it difficult because of the complexity of their existing legacy systems. A single application can interact with numerous other applications, which means removing it from an on-premise data center could disrupt the entire ecosystem. There’s also the reality that some legacy applications may not work in the cloud; others may require extensive rework but still not generate the desired performance.
The Response of Cloud Service Providers
Nonetheless, the financial services industry is increasingly embracing the cloud. In the last couple of years, AWS has been heavily promoting its cloud services to this industry. It now counts Capital One, FINRA, Nasdaq, and Pacific Life among its customers. Microsoft Azure and Google Cloud Platform are also attracting their share of financial services companies.
Among the reasons these organizations are finally becoming more comfortable with the cloud is that more — although not all — cloud services providers (CSPs) now understand their concerns and requirements, and have tailored their cloud offerings accordingly.
They’ve invested in leading-edge security and implemented data privacy best practices such as file- and volume-level data-at-rest encryption, secure key management and access controls. In most cases, they offer levels of security that most companies lack the expertise or resources to implement and manage on their own.
Some have also gone the extra step to achieve HIPAA and PCI DSS compliance. Doing so demonstrates they can meet the stringent security requirements of these standards and enables their customers to leverage some of the security protocols they’ve put in place to meet their own compliance requirements.
The Importance of Strategy and Service
In contrast to AWS, Microsoft, Google and other big-name providers, CSPs that cater to mid-market businesses can offer personalized, concierge-type service to provide their customers in the financial services industry with greater peace of mind and return on investment (ROI).
For example, rather than pushing a one-size-fits-all cloud service, US Signal’s solution engineers take the time to understand their customers’ current IT environments and their short- and long-term goals. This enables them to help their customers put an IT strategy in place that considers and optimizes their current IT investments and legacy systems; helps them achieve leaner operations and a stronger focus on core business; and enables them to leverage technology in the most effective and efficient ways — all while meeting their compliance requirements.
A Matter of Survival
Another compelling reason that more companies in the financial services industry are making their move to the cloud — at least with baby steps: the need to survive and thrive. Like companies across just every industry, those in financial services must undergo a digital transformation if they are to stay in the game. They must leverage the wide array of data analytics and artificial intelligence tools now available to help them gather customer insights, drive innovation and open new market opportunities.
They must implement on-demand, easy-to-use services to meet the demands of their tech-savvy customers. They must transform delivery strategies and their customer relationship management approach to drive customer acquisition and retention. They must employ and support productivity, social, collaboration, and unified communication tools that enable their employees to work effectively and efficiently wherever they are and on whatever device they are using.
The Time for Action
It’s time for the financial services industry to leverage the power of the cloud to make it all happen. The opportunities and capabilities are out there. So are the data privacy and security protocols.
To learn more about US Signal’s cloud services or to find out how the US Signal team can help you with your IT strategy, call 866.2.SIGNAL or email firstname.lastname@example.org