Remember the “no-internet policy?” It wasn’t so long ago that companies were keeping their employees from exploring the world wide web on company machines. But as all-things-internet have become ubiquitous, including mobile devices and, yes, cloud computing in the workplace, hopping online to get things done—to perform essential professional tasks, let alone browse favorite website—is commonplace. No wonder Gartner reports that by 2020, a corporate “no-cloud” policy will become as rare as a “no-internet” policy is today.
Freedom in the Cloud
This is significant in the financial services industry because it has been among the slowest to transition out of legacy systems and into more agile and cloud-based IT environments. That’s because most financial services institutions like banks and insurance companies—particularly those that were in operation decades before the internet was even a concept—operate in highly regulated marketplaces demanding strict security protocol. On-premise systems, the latest-and-greatest in their time, were inherently complicated and engineered to keep data and processes in technical and functional silos.
The decision to stick with the status quo—that is, legacy systems—made a lot of sense…until now, when cloud technology has made it far easier to keep pace with not only their web-enabled customers, but with the fintech disrupters popping up across the industry. Nimble by nature, these relatively new market entrants are unencumbered by yesterday’s technology and have had a leg-up on their older, larger counterparts. But this is changing, as more established financial services companies are adopting cloud IT environments and embracing a new level of consumer-friendly digital flexibility.
Gartner predicts that moving forward, companies in highly regulated industries will deploy software in a mixed fashion, meaning they will choose cloud solutions as well as traditional on-premise ones. Most likely, they’ll end up with a hybrid solution that leverages the public cloud, the private cloud, and dedicated servers. In fact, they say that by 2019, more than 30% of the 100 largest vendors’ new software investments will have shifted from cloud-first to cloud-only, demonstrating the shift toward “pure play” cloud computing.
Meeting Customers’ Digital Needs
As PwC’s strategy& research shared in their 2017 Financial Services Trends report, financial services companies are reassessing their IT operating model, decentralizing their digital infrastructure, and moving to cloud-based solutions in order to “meet the demands of the new marketplace—to offer competitive, feature-laden, well-designed digital products and services, with a much faster speed-to-market, while lowering costs and continuing to support legacy systems.” And Forrester’s predictions sync up, placing emphasis on the “customer experience” and cloud-based ecosystem’s ability to “connect employees, customers, partners, vendors, and devices to serve rising customer expectations.
By running IT—or at least some of IT—in the cloud, financial services companies will be able to focus on innovation, integration, scalability, and sharpening their competitive edges. On the inside, organizations will become more efficient with fewer manual processes, more robust data collection and business intelligence tools, enhanced employee and partner collaboration, and, ultimately, faster speed to market. On the outside, customers will enjoy better customer service, more mobile and digital functionality, and faster access to the products and services they need from their partners.
Moving Into the Cloud
If your financial services company wants to evolve with the marketplace and adopt the cloud technology solutions you need to keep up and stay ahead, you have options in the following areas:
- Enterprise resource management
- Core financials
- Expense management
- Financial and operational reporting
- Back office accounting
- Business payments
- HR services
rinehimerbaker can help you assess your needs and current IT environment so you can plan a successful transition to cloud computing. Contact us to find out how to get started today.