Many financial institutions are looking for ways to simplifytechnology, reducing the time and complexity involved with just keeping theirIT enterprise up and running. The answer for many lies in turning their focustoward the cloud. And those that do aren’t alone—research firm Gartnerestimates that total spending on cloud services will increase from $110 billionto $210 billion in 2016.
Decisions related to technology should always be grounded inlong-term strategy. The path to cloud adoption is different for everyinstitution; however, there are some precipitating factors that are commontrigger points for everyone. For instance, on April 8, 2014, Microsoft willcease support for Windows XP, which means users will lose desktop applicationsupport, and no additional software security updates will be released.According to the Microsoft Security Intelligence Report, XP computers are sixtimes more likely to be infected with malware than are those using newer, morerobust software. So it might be time to move toward desktop virtualization,which allows multiple desktop environments to be managed and secured from acentralized server platform.
While the Windows XP end-of-life event might provide amplecause for some to move toward cloud adoption, many financial institutions arestill considering how cloud services can be utilized most effectively withintheir overall IT strategy.
Single Source or Not
While appropriate levels of cloud adoption differ betweeninstitutions, it’s worth noting that great efficiencies can be gained by financialinstitutions when there’s a single-source managed services provider (MSP) forall IT services. Full-cloudadoption allows the bank or credit union toeliminate unexpected capital expenditures related to technology maintenance andsupport, while also acquiring a more consistent end-user experience due to greaterstandardization. The MSP can implement best practices without the need tocharge the financial institution for each infrastructure upgrade or attemptingto retrofit out of date systems. Single sourcing allows the MSP to integratethe solutions and have clearly defined management, leading to enhanced serviceand more clearly defined expectations.
SaaS Solutions GainingSteam
Full-cloud adoption will be the way to go for some banks andcredit unions, but we will continue to see more institutions using a hybrid modelof cloud adoption by combining SaaS solutions with internal solutions—particularlyfor commodity applications as well as highly specialized applications, which are difficult to host internally because theyrequire a specialized skill set. For instance, many financial institutionsutilize hosted exchange, service bureau models for their core and Internetbanking, but maintain internal systems for file sharing and loan origination.
Cloud Security
Understandably, cloudsecurity will always be an issue for banks and credit unions, since so manycloud providers fail to understand the industry’s regulatory and securityrequirements. It is very important for financial institutions to partner with anMSP that specializes in providing service and security to the financialindustry, as they are subject to the same types of audits andregulations. This significantly eases the institution’s burden when auditorsand regulators arrive onsite looking for due diligence information.
BYOD and The Cloud
The cloud and the BYOD movement each were born from the consumerizationof IT services. End users utilize cloud services in their personal lives, andnow they’re expecting the same access to resources in their work lives. Foryears, the security and compliance requirements of financial institutions slowedthis type of deployment, but the pressure is mounting to force it into reality.MSPs specializing in financial services understand the rising tide of BYOD and canplan for ways to allow financial institutions to manage data access, so it canbe delivered securely to any device without compromising the security andconfidentiality of their customers and members.
Keep in mind, there are countless options and levels ofsupport for cloud services available. Banks and credit unions in particularmust consider all factors associated with cloud adoption and understand therisks and benefits the go with whatever provider they choose. It is imperative to choose a provider thatwill work with the organization on audits and compliance rather than simplyputting them into the same deployment they sell to any customer that uses theirservice.
Ben Reeser is a seniorarchitect with CSI’s Managed Services Division.