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“By 2005 or so, it will become clear that the internet’s impact on the economy has been no greater than the fax machine’s.” – Nobel Prize-winning economist Paul Krugman, 1998
Every so often, there comes a tool that changes the name of the game – and the cloud is one of those. Whether it will ever reach the internet’s scale of influence is anyone’s guess but make no mistake: it’s already revolutionising the professional market.
Traditionally the financial services sector has sometimes been slow to embrace new technology. But maybe it has learned from Paul Krugman’s unfortunate prediction because it seems to have recognised the cloud for what it is: a game-changer. Perhaps it shouldn’t come as a total surprise, considering the range of competitive advantages on offer and the cloud’s potential for the future.
Here are five ways those advantages are paving the way for the future of financial services.
Managed cloud eliminates the need for expensive hardware and infrastructure. At the same time, it frees up resources and facilitates scalability and flexibility in resource management. In other words, FS companies can reduce their IT costs and focus on their primary operations without sacrificing quality or efficiency.
Data security laws and regulations are getting stricter (and with good reason). Hosting on private cloud offers enhanced protection of sensitive data, advanced encryption, multi-factor authentication and regular security audits – all of which may be more rigorous than on-site solutions. These services would need to be installed manually if not hosted on the cloud.Organisations that prioritise the security of their data and workflows may find private clouds to be a more suitable option than public, hybrid or on-site ones. Private cloud environments are tailored to the specific user’s needs, granting them greater control over their security. These cloud solutions also come with managed services that ensure up-to-date patching and other security updates. Using a private cloud is thus an ideal way for businesses to maintain optimum assurance.
Also, private cloud with a global hosting provider can allow the data to remain within specific boundaries instead of relying on local jurisdictions (which can result in legal nightmares), eliminating the need for multiple physical data centres. In summary, it offers better protection and compliance with local laws and regulations.
Trading local but global
Global cloud providers offer low-latency solutions for businesses needing instant data access, optimised performance and quick loading times. This is particularly important for financial trading companies that rely on high-speed connectivity. Cloud providers make it easier for these companies to store data close to their target markets, providing the speed and reliability they need. With the help of global cloud providers, businesses have an effective way to ensure optimal access to their stored data, from anywhere at any time.
Traditionally, companies purchased and maintained their computing infrastructure. This meant they would have to manually add servers to meet demand if they reached peak capacity. Bursting capabilities lets companies spin up servers whenever computing demands spike past peak capacity and reduce them again when the rate of data decreases. This is because the infrastructure is already in place by the cloud provider, who has built it to be ready to use. Consequently, it’s a convenient and cost-effective way of supporting workloads with varying demand patterns and seasonal/situational demand spikes.
Agility and innovation
Because of its ever-evolving industry, the FS sector must be innovative and respond rapidly to market fluctuations. The cloud provides the perfect solution. It offers the scalability, flexibility and speed needed to develop new applications and services or react swiftly to changes. In short, it offers agility and innovation.
A hot topic related to innovation in the financial industry, particularly in payments, is blockchain. But if a business wants to implement blockchain, it should first consider moving away from on-premises data storage and into the cloud. This is because:
• On-premises solutions are not always the most secure choice. Without Tier 3 data centre standards, there’s a much higher risk of security breaches. Proceed with caution.
• To gain the benefits of redundancy and decreased latency, businesses typically need nodes located across multiple regions or data centres. On-premises deployment will usually be insufficient in that regard.
• When dealing with large-scale, ongoing operations, a private cloud is most often the cost-effective solution compared with other options. An on-premises setup might fall short when it comes to virtualising and distributing architecture across multiple data centres or regions (for redundancy and low latency).
• To handle heavy use in short bursts rather than constant use, the public cloud is typically the best option. Unfortunately, this is not a simple process. It requires a ton of development work and close, continuous monitoring. It’s nearly impossible to make use of that bursting on the cloud without dedicated teams of experts working on it 24/7.
The competitive advantages on display represent not only what cloud brings to the table today, but also the sheer potential it holds for the future. The list of advantages is extensive, from cost savings to improved security, from enhanced collaboration and increased agility to better data management. And that list will only grow. In addition, as financial services gravitate to blockchain (particularly the payments sector), the cloud will become essential.
The only question is: which hosting provider do you go with?
Well, we hope you’ll choose Hyve! We offer a wide range of solutions, from mission-critical private and managed cloud to colocation and security services. Our customers have awarded us the Investors in Customers gold standard for managed hosting providers, we love what we do and are proud of to be recognised as providing world-class customer experience.
Originally published on Business Reporter