The need for robust security and to comply with stringent data privacy regulations have, until recently, prevented many finance companies opting for cloud computing. Today, however, there’s a growing shift towards the cloud as more organization adopt digital-first approaches in a bid to stay relevant in the rapidly advancing, technology-based market. Cloud technology provides finance companies with the infrastructure needed for digital transformation, helping them to improve customer experience, drive growth and stay competitive, all while enabling them to remain compliant with regulations. Here, we’ll examine why finance companies need cloud computing.
Cloud keeps financial data secure
It is no surprise that finance organisations are heavily regulated. The data they hold is highly sensitive and includes both the financial information of customers and details of trading operations. This makes it an extremely valuable target for cybercriminals which, if stolen, could have a major impact on personal and business customers and on the financial company itself. Organisations within the sector therefore need to put security at the centre of their IT operations and must develop a secure infrastructure that robustly defends them against attacks.
The issue for many finance companies is that achieving such security in-house is not easy to accomplish. State of the art security tools are expensive to implement and require specialist expertise. Cloud providers, however, already have both the tools and the expertise in place to keep their infrastructure and their customers’ systems and data secure. This also helps them maintain compliance with regulations like GDPR and PCI DSS. Migrating to the cloud, therefore, can provide levels of security far better than most companies can achieve on-site and in most cases, come included in the cost of the service.
Cloud vendors provide protection for finance companies in a number of important ways. For those with concerns over the multitenancy of the public cloud, for example, this can be overcome by adopting a hybrid cloud infrastructure where data is housed in a single-tenancy private cloud and applications on the public cloud.
Of course, whether public or private, the cloud system will be robustly protected by a powerful arsenal of leading-edge security tools. These include state of the art, next-gen firewalls, like the FortiGate firewalls used at eukhost, as well as intrusion detection and prevention tools, anti-malware, data encryption, SSL certificates, DDoS protection, VPNs, email verification and encryption tools, spam filtering and more.
The providers themselves have to comply with stringent security regulations and will have their own security policies and procedures in place. These will include ensuring that they have enough redundancy in their system to maintain services should one of their datacentres be taken offline, providing backup power and cooling systems, maintaining physical security of the premises, and guaranteeing availability with an SLA. This way, they can ensure a company’s financial data remains secure and available at all times.
With regard to GDPR, financial institutions need to be careful that vendors do not store their data in countries that do not provide the necessary guarantees for privacy. Any data stored in datacentres in the USA, for example, can be legally accessed by the US government security agencies if they think it pertinent to an investigation. As this contravenes GDPR, the data of UK and EU citizens should not be stored in such countries. This is why, at eukhost, all our datacentres are located within the UK.
Taking advantage of the cloud
Financial companies that have already migrated to the cloud have put themselves in pole position to benefit from the digital revolution taking place in the market. They are able to adopt and make use of advanced fintech solutions, develop and deploy new services at speed, and analyse big data using tools like AI and machine learning to discover new growth opportunities, predict market movements and find more cost-effective and efficient ways to operate.
With data centralised and synced, teams can collaborate on projects far more effectively, regardless of where in the world they work, employees can work remotely and customers can access their accounts, services and communications via the gamut of devices that they now make use of.
The speed at which the cloud operates also provides benefits. Servers and applications can be deployed instantly and workloads that would have taken weeks to carry out on traditional systems can be done far quicker. Indeed, the interconnectivity of the cloud provides a genuine opportunity for finance companies to benefit from the use of real-time data, enabling them to react swiftly to changes in the market.
The growing reliance on IT in the finance sector has burdened companies with the ongoing costs of using it. The cloud provides significant opportunities to reduce and better manage those costs. By moving to the cloud, companies no longer need to invest in expensive hardware or pay for the running of a datacentre. Instead of capital expenditure, they shift to operational expenditure and have greater control over what is spent, by whom and when.
Additionally, the scalability of the cloud enables finance companies to increase IT resources on-demand. Whether catering for peaks in website traffic or undertaking resource-heavy processing, their system can access all the storage, bandwidth, CPU and RAM it needs to maintain service. The advantage, financially, is that this is charged for on a pay-per-use basis. Once the demand has ceased, the company can scale down and reduce costs.
Preparing for the future
The pandemic has not only hastened the drive for digital transformation across all sectors; it has also seen customers flock to digital in unprecedented numbers. This ‘push-me-pull-you’ relationship is driving the finance sector along the digital railroad. Consumers are pushing for better online services and customer experiences and financial companies are pulling new customers in by providing them. Increasingly, those services need cloud infrastructure and cloud-based applications to make use of technologies like AI, machine learning, IoT and automation.
Cloud technology opens a world of opportunity for finance companies, enabling them to innovate quickly, improve customer experiences and work smarter and more efficiently. At the same time, it provides a compliant environment in which to store their sensitive data and keep it secure.