Part II: Benefits of Third-Party Cloud-Based Solutions in the Financial Services Industry
By Colt Younger, Delta Data, Senior Vice President, Product
This is the second installment in a three-part series that explores Cloud Technology and the Financial Services Industry. In the previous entry, we addressed the slow cloud adoption within the industry and how perceptions have shifted. In addition to this entry, which delves into the particular benefits of cloud technology and cloud-based solutions, the series will also feature a future entry on specifics related to the public cloud.
Today, the financial services industry is grappling with a multitude of new challenges, and technology decisions continue to remain at the forefront of the conversation.
Understanding how third-party cloud-based solutions produce results and provide benefits is essential for firms seeking to improve their business operating models and strategies. With the capabilities to maintain front, middle, and back-office functions, these offerings support an abundance of operations.
Third-party cloud-based solutions are shifting how the financial services industry operates by providing opportunities for enhanced data centralization, improved cost savings and efficiency, greater scalability, and expanded security within firms’ technology and business operations.
Enhanced Data Centralization
Traditionally, information and data about assets was stored across multiple servers and computers, making it difficult and time consuming to find the information needed to perform tasks.
Utilizing cloud-based solutions from third-party providers offers a mechanism for well-organized data management and eliminates the need for more than one server or digital location for the storage of sensitive and important financial information.
The cloud can also greatly help with creating more accurate inventories and records to optimize the storage of data and information. This can, in turn, greatly improve a firm’s day-to-day efficiency and productivity, as well as in the long term.
Improved Cost Effectiveness and Efficiency
There are significant ways in which outsourced cloud-based solutions can save a firm money and reduce the overall operational costs required to run and manage essential software and technology.
Without the cloud, the storage and use of information and digital infrastructures relies upon a firm having the proper equipment – including hardware, data centers, and technological facilities to ensure the systems are operating correctly and accurately. The combination of the cloud with third-party solution providers reduces the need for external equipment, easing operational costs.
Rather than having to manage all aspects of digital infrastructure through a large and costly internal operation, cloud-based solutions can streamline these processes and improve cost efficiency. In addition, the efficiency of the cloud can also save a firm a consequential amount of time, which can then be reallocated to focus on company-wide productivity.
As firms’ managed data volume increases, the cost of traditional financial service IT operations has the potential to drastically increase, as the operating systems in place must have the capabilities to handle this increased amount of data.
Scalability is one of the fundamental strengths of cloud-based solutions. The cloud allows for a firm to be much more flexible in scaling up or down, according to how much asset or other financial data must be managed at any given time.
Improved scalability also helps to minimize risk and optimize the maintenance of software and systems that are necessary for completing critical financial services tasks. If faced with the need to decrease data capacity, adjustments to infrastructure can be made easily and efficiently.
As the financial services industry continues to shift, the ability to pivot with minimal operational disruption becomes critical for firms. With the profound uncertainty currently surrounding the entire industry, third-party cloud-based solutions offer commutable storage and an operational capacity that enables cost-effective scale.
The combination of a changing economy and new, often evolving, regulations continue to put pressure on firms to seek new ways to boost efficiency and remain compliant, all while focusing on important growth and established strategic goals.
Storing information and operating virtual infrastructures through the cloud can often be safer than traditional legacy systems. As we noted in the first entry of our Cloud Technology series, cloud service providers have worked to enhance security capabilities and expand their compliance scope.
As a result, cloud-based solution providers are increasingly adept at operating a more modern and secure infrastructure than many financial firms could do in-house.
In addition, the cloud greatly simplifies the process of backing up data, ensuring the security of a firm and its clients’ data and information. Data recovery is much faster when carried out through the cloud, and it prevents loss at a much greater scale.
Benefits of Cloud-Based Solutions are Unequivocal
The reality of current industries and markets is that digitization consistently demonstrates its benefits, especially for financial institutions that need the flexible technology that outsourced cloud-based solutions can offer.
This digitization can significantly streamline every-day measures to be less complicated and more efficient. The functionality, scalability, and security of third-party cloud-based solutions, like those offered by Delta Data, can’t be matched by most legacy systems, outweighing the argument for firms to build and host their own.
Contact us to learn more about how Delta Data’s solutions can streamline your operations with industry-leading software via the cloud.
The third installment in this Cloud Technology in the Financial Services Industry series will explore the public cloud and how it compares to other cloud environments available to financial institutions.