BFSI VISION Cloud Computing

   
 


Girish VS

Managing Editor, BFSI Vision

On Cloud Nine

Cloud computing cannot be ignored by the financial services players any more. For a very long time financial institutions were resisting moving on to the cloud – the biggest stumbling block – their concerns for data security and ownership. The recent massive security breach at Apple's cloud data service is not a welcome news for cloud technology advocates. The 2014 Gartner Hype report on Cloud Computing places it in the trough of disillusionment – with a possibility that it will move into the slope of enlightenment soon.(Gartner Hype Cycles provide a graphic representation of the maturity and adoption of technologies and applications, and how they are potentially relevant to solving real business problems and exploiting new opportunities.) Cloud is finding increasing acceptance among financial services players – with order management systems and portfolio management systems finding cloud attractive.

The trouble with Cloud – as with any other technology innovation – is that we need to choose the right models and applications that can be moved to cloud. The reasons for moving on to the cloud remain strong as ever – cost savings, scalability, mobility, time to market, data virtualization and standardization. And so do the concerns – security, regulatory inhibitions and data privacy.

The financial services industry has been rightfully wary of cloud technology. They deal with some of the most sensitive and private data of their customers. However a new range of security and information solutions is set to provide more comfort to the financial services industry. According to Datamation's David Linthicum, "technologies like persistent encryption from the client side into the cloud, tokenization for extra-sensitive data, and DLP to detect potential violations all go a long way towards protecting data and controlling its access and usage. In fact, in some cases, cloud computing can actually improve security"

What can the financial services sector do to adopt cloud? With a little bit of planning and awareness of the data and regulatory obligations about data privacy, we can see a rise in cloud usage among financial services players. Concerns for data privacy will remain. And the prudent financial services manager will do well to avoid putting customer's sensitive data on cloud. There are a number of applications that can be adapted to the cloud. And no, I believe mailing solutions are not suitable for cloud – not unless you are not using the mail to convey sensitive information.

What can a financial services firm put on the cloud – for starters processes like billing, payroll, content management, service desk management. These applications do not have the same stringent data privacy concerns and therefore will not be prone to hacking.

 
  Source: Gartner (August 2014) Hype Cycle for Emerging Technologies