Financial sectors have their own set of reservations when it comes to accepting cloud computing and using it on a large scale. Indeed, financial servicing bodies have their own strict regulatory compliance that are very important for executing new technologies their management. However, third party cloud vendors have a tough task in convincing their bank clients or any other businesses relating to finances when it comes to selling their cloud services. Money-related data is very crucial for the banks or credit unions in order to maintain trust among their clients and these organizations are responsible in maintaining a profound strategy that will not compromise the data it holds.
Below are some of the factors that make embracing cloud features difficult in the financial services sector.
Fear of the Data Centers:
Financial institutions take no chances in planning their data centers as these are crucial information sources that consist of details of their customers’ bank accounts, credit and debit transactions etc. Banks want the third party cloud service vendors to make sure that there are no data holding capacity issues so that no matter how many customers transact with their organization it should not have any effects on the cloud storage. Banks fear the IT as any compromise with respect to data or technology crashes can impact negatively on the company’s brand and customer loyalty. The banks or any financial organization will trust the cloud companies only after the bank’s IT team evaluates the strength and weakness of the cloud hosting firms. Other common failure conditions of the cloud that creates significant loss to the banks are power threshold breaches, low component utilization and poor hardware usage by the cloud service vendors that will eventually give up on their motive to serve effectively.
Cyber Security Breaches:
Financial service companies flourish well if their digital channels are reliable and fool proof. Banking organizations are the obvious targets of the hackers and intruders. Security of the cyber space should be strategized well from leading technologists and architects. This kind of high standard technology intervention must be provided by the professionals who are handling the clouds for these finance organizations. Cloud partners of the financial sectors should be proactive in seeding confidence in their finance based clients by offering the best prevailing robust cyber security strategies.
Banks seldom trust technologies for greater ROI:
Financial bodies are highly cautious when it comes to investing in the IT infrastructure. Banks are lacking speed in embracing cloud services as these organizations spend a fortune of time in coming up with a effective road map to manage cloud services delivery systems. Cloud servicing companies should explain the banking management about how the ability to spin up the resources improves elephant fold times on cutting down on time and expenditure while providing a cutting edge competition.
August 23, 2012 at 6:32 am
All technological forms have advantages and disadvantages and that cloud computing is the same. Over all cloud computing is versatile.
August 23, 2012 at 6:49 am
Since I work for a cloud computing company I think what most financial institutes fear is a security breach. A small leak can cost them millions and they might end up facing potential law suites. However cloud applications are working around that by providing on-site implementation within company intranets and giving more secure desktop applications that sync with the cloud services.
August 23, 2012 at 6:53 am
Thanks for the bit about the fixes the cloud computing companies are looking out for to make the cloud technology a mainstream channel for transactions!
August 23, 2012 at 1:10 pm
Hey, Nishadha! Since you know what your niche of clients is afraid, all you have to do is to reassure in a marketing campaign of the safety of their database 🙂 They won’t change their minds about cloud technology on their own, you know…
August 23, 2012 at 7:49 am
I do not have any idea regarding financial institution. However, I think that there are so many application cloud computing technology must vary in order to have great transactions in channel. Thanks for sharing ideas regarding the article.
August 24, 2012 at 1:08 pm
That was a good insight about security on cloud computing & private and public clouds work and functionality 🙂 Thanks for sharing 🙂
August 24, 2012 at 1:48 pm
Your welcome! Glad you liked it Alfred.
January 16, 2013 at 7:47 pm
i think banks also worry about service interuptions. look at amazon cloud service it went down not to long ago. security is main reason they are worried becuase they do not want private checking ad savings account info at more places that can be breached