Finance

4 Business Advantages of the Cloud for Financial Services

August 17, 2023 | By Greg Dougherty

Financial institutions, banks, accounting firms, credit unions, and hedge funds may struggle to stay compliant and protect themselves from cyberattacks’ rising frequency. While data security may be top of mind for financial organization teams, they can gain peace of mind and set themselves up for long-term growth by partnering with a managed cloud services provider. A provider’s team takes time to understand unique infrastructure challenges and act as a guiding partner for companies as they grow their stack and expand their services.

Companies in the financial services sector leveraging managed cloud solutions can:

  • Secure mission-critical data and applications and promote business continuity
  • Meet strict compliance standards
  • Shift cloud environment accountability
  • Increase cloud environment performance and uptime

Read more: Top 5 Reasons Why Outsourcing to a Cloud Provider is Beneficial for IT Managers

1- Greater Security

For financial and banking companies, security and data protection are paramount, especially since they are one of the most targeted industries when it comes to cyberattacks. The total cost of a U.S. financial sector data breach was $5.85 million in 2020. Malicious attacks caused 52% of those data loss events, system glitches accounted for 25%, and human error made up 23%.

While IT teams in the financial space have to secure data as it moves between multiple locations, working with a cloud provider can provide access to a fully monitored and secure cloud environment to house necessary data and applications.

2- Ensured Compliance

Financial institutions must follow strict data protection standards due to the sensitive transactions and information they process and conduct. A growing threat of cybersecurity attacks for the industry has prompted several federal-level compliance requirements with expensive associated penalties:

  • Federal Information Security Management Act (FISMA)- requires companies to monitor sensitive data continually and reduce risks associated with data breaches by implementing standardized IT security controls.
  • Payment Card Industry Data Security Standard (PCI DSS)- ensures financial companies processing, storing, or transmitting cardholder data maintain a secure environment
  • Sarbanes-Oxley Act (SOX)- necessitates that institutions monitor, log, and protect electronic financial records and take responsibility for the accuracy of that documentation

Managed cloud service providers design and update their environments to meet stringent compliance needs, enabling financial organizations to focus on their day-to-day operations instead of continually updating their infrastructure stack to adhere to those standards.

3- Lower Latency

Investment firms can struggle to achieve the IT connectivity speeds they need to stay competitive and ensure they can process transactions within fractions of a second. While remote data centers can be less expensive to operate, they create latency problems that can hinder business success. Instead, firms can leverage cloud services from providers with data centers hosted in locations closer to them to support low latency, high-frequency trading.

4- Shifted Responsibility

Depending on the managed cloud service provider’s company size, financial organizations will have varying responsibilities for their environment. Some providers often cover physical damage to the data center but leave most accountability on the customer in a self-service type model.

Other providers, on the other hand, take a more hands-on approach to cloud authority. Financial sector companies working with those cloud partners receive access to a team of experts that take full ownership and accountability for the entire infrastructure stack, allowing businesses to focus on their core growth objectives.

Cloud Solutions for Financial Sector Businesses

Financial institutions looking to meet compliance, security, and performance goals should consider working with a managed cloud provider that offers the following cloud financial services:

  • Disaster Recovery-as-a-Service (DRaaS)Ensured business continuity in the event of natural disasters, outages, breaches, or other forms of data loss.
  • Backups-as-a-Service (BaaS)Redundant, reliable, and secure backup, storage, and recovery for mission-critical data and applications on a fully managed off-site infrastructure.
  • Private CloudHighly scalable, customizable, agile, and secure cloud infrastructure customized to meet compliance and redundancy needs.

Want more information or guidance on choosing the right managed cloud solution for your business? Reach out to the Opti9 team.