Is cloud adoption necessary for your bank?
Challenger firms in the financial services industry have reaped significant benefits from cloud computing. The increased flexibility, interoperability, and scalability that cloud computing provides have proven essential to the expansion of businesses. This article from SmartOSC Fintech will demonstrate why banks must use cloud adoption.
Data protection and privacy will not be compromised
One choice for remotely stored personally identifiable information is pseudonymization, which means separating data from specific identifiers (PII). Additionally, cloud adoption has not been pseudonymized may be found and redacted using cloud functionality.
Modern encryption techniques and efficient key management are also essential to safeguarding client privacy and preserving client data. Financial institutions have several key management options, including using the cloud provider’s own service, client-side encryption, or having a reputable third party maintain their keys.
It will be easier to fulfill regulatory compliance
One might believe that moving to the cloud adoption makes it more difficult to adhere to legal obligations. Some regulators worry that when the industry’s IT infrastructure is managed by a third party, they won’t be able to evaluate it.
Numerous legal needs, such as third-party validation and regular updates that take into account the most recent regulatory developments, are already included into cloud services. Contracts may be localized to abide by applicable rules and laws.
A company will be independent on one cloud provider
The worry that having only one provider will limit one’s flexibility is another misconception. Vendor lock-in does not tie a company to a single cloud adoption provider, even though cloud transformation may require fewer suppliers and even choosing a preferred partner.
Leading organizations concentrate on three dimensions to achieve cloud sovereignty:
- Data access must be restricted by procedures to just those provider actions that are deemed required for data sovereignty.
- Operational sovereignty calls for guarantees that employees at a cloud service provider cannot jeopardize client workloads,
- Financial institutions must be able to control the availability of their workloads and run them wherever they see fit without relying on a single cloud service provider.
Migration to the cloud decreases architectural complexity
According to the Bain survey, respondents across cloud adoption sectors predict that over the next three years, the share of on-premises infrastructure will decline by a cumulative annual rate of 13%, but on-premises deployment is unquestionably here to stay.
Therefore, hybrid multi cloud systems may get more complex. However, by enabling container orchestration and management, policy and security automation, traffic monitoring, and management across platforms, contemporary cloud management solutions may successfully handle such complexity.
The cloud adoption is appropriate for the core business
Cloud-based services for the financial sector initially concentrated on auxiliary services and niche applications like customer relationship management or software creation. Core banking systems that are cloud-native are now emerging in significant incumbent institutions.
In general, cloud adoption technology is seen as being crucial for embedded finance, particularly quickly expanding applications like buy now, pay later and banking-as-a-service, which thrive on agility and interoperability.
Enterprises employ cloud adoption as a method to save costs and risk while increasing the scalability of Internet-based database capabilities. If you have any inquiries about fintech, get in touch with SmartOSC Fintech.