The two great non-issues of cloud adoption
Addressing security and cost when considering a move to a cloud-based core
Bankers have been wary of the cloud — skeptical of its security and cautious about its costs. But today, the real risk isn’t in migrating to the cloud. It’s in staying in the data center, where the potential of secure and private data is locked up, holding back business growth and limiting engaging account holder experiences. In a world where people increasingly choose their financial institutions based on the quality of digital, user experience and overall relevance than on rates or branch locations, keeping that potential locked up is a certain path to obsolescence.
Yet even financial institution leaders who understand the business impact of new technologies and consumer demand continue to struggle to rationalize the security and costs of cloud migration relative to business growth. Their concerns may have been valid when the cloud was new, but twelve years have gone by since AWS was launched. Now it’s time to clear up some misperceptions.
Your data is always under your control
There’s a common misunderstanding that the cloud is a giant stew intermingling everybody’s data and that cloud service providers won’t protect that data as well as the financial institution that is obligated to do so by law — and by ethics.
Physical resources such as CPUs and routers are shared, but each account holder’s data is isolated from others onto physical disks, even when virtual storage solutions are in use. Financial institutions can also choose which data centers will house their data, so a community bank or credit union always maintain control of data access and availability.
Service level agreements (SLAs) provide additional control. An SLA can specify when data will be backed up and replicated, and can also include a requirement for full audit capabilities to ensure compliance with the terms.
The critical question is this: Who has the greatest capability to protect the data of a community bank or credit union — their small overworked IT team or the thousands of eat-sleep-and-breathe security specialists on staff at Amazon, Microsoft, and Google?
The economics of agility
Don’t think of cloud-based cores in terms of the initial spend. The ROI is where the rubber meets the road. And it’s a lot of rubber. One estimate shows that switching to the public cloud from on-premises deployment saves a financial institution 55% in total cost of ownership, while also changing the cost model from capital expenditure to operational.
But money in the bank, so to speak, isn’t the only factor impacting a financial institution’s profitability. Competitiveness is just as important in an era when neo-banks like Chime and SoFi are offering the personalized service and convenience that were once the sole dominion of community banks and credit unions. Forty-one percent of people who bank with community banks and credit unions say they’d take their business elsewhere if it was more convenient — and what’s more convenient than opening accounts, applying for loans, and paying bills on a phone? The only way to meet the instant-everything expectations of modern banking consumers is through the cloud.
The future is flexible
A cloud-based core isn’t just a way to gain better security and long-term cost reductions. Its real strength is in providing agility. Financial institutions that use a cloud-based core solution like Fusion Phoenix can jump on fleeting opportunities without the need to buy and implement more servers or hire new technical staff. They’re always ready to grow.
We are here to help your business reach its goals