Studies upon studies have shown that there has been a rapid increase in the uptake of cloud computing in the banking and finance sector. Yet, only about 1 out of 3 banks can glean the full potential this technology has to offer. The banking industry has been relatively slow to adopt cloud computing compared with other industries.
Unfortunately, challenges associated with business and operations hold the key to why banks who have embraced cloud computing are unable to leverage the technology’s full potential and why other banks remain on the fence about taking up this technology. This comes out of fear regarding potential cybersecurity failings of the cloud and cloud service provider (CSP) compliance. It is based on the complex regulatory framework that governs the industry.
If you too are in one of these categories, here is a look at some of the key challenges as well as the opportunities they offer:
Misalignment between Business and IT
The lack of sync between a bank’s business goals and the technology that it uses can be a huge challenge. However, finding the synergy between these two aspects can make all the difference, but while you figure that out, you can first focus on the services and products that could benefit immensely from cloud technology and take it from there.
One of the most important issues that holds back the adoption of cloud computing in this sector is the vast network of legacy infrastructure such companies have relied on for years. It doesn’t help the case for cloud computing to realize that such infrastructure is usually efficient and stable as well. To deal with this particular challenge, banking and finance companies ought to start by focusing on priority product use cases in aspects of business and operations that are observing the most change. Once the momentum is built, use it to push for increased adoption.
Lack of Skills
Cloud computing is a relatively new phenomenon, so a shortage of relevant expertise and skills in this regard is understandable. This shortage, then, becomes another barrier to the adoption of cloud computing in the sector. What banks can do, then, is offer training, of course, but besides appropriate training, it would also be a good idea to tap into one’s network to onboard the required capabilities and expertise.
Security and compliance-related concerns remain among the biggest deterrents to the adoption of cloud computing in the banking sector. This is even though even regulators are starting to offer increased support for this change. A good way to work around this particular challenge, then, is to leverage industry bodies and government associations to help educate stakeholders about the benefits of cloud computing in the sector. It would be a good idea to collaborate with experts, cloud service providers, etc. to foster momentum and help regulators understand how cloud computing for banks can be just as compliant and secure as traditional infrastructure.
There is no denying that embracing cloud computing is a challenging undertaking for any entity operating in the banking sector. However, given the opportunities and benefits cloud computing offers, adopting this technology is well worth the effort for all industries across the globe, especially the banking sector.
But the question remains — how does one overcome the challenges and issues that stand to deter such a change? One good way to deal with the challenges of cloud computing in finance is to enlist the assistance of a trusted service provider. Their expertise will be valuable not only in navigating such challenges but also in ensuring the success of your endeavors.