The promise of cloud computing is that by moving data and services off premises and into the Internet or the cloud, companies will save money and will often get better computer services. Prime examples of cloud-based computing are Gmail, which has some 425 million active users per C/Net, and Salesforce.com, a customer relation management tool.

"Cloud is pay for what you use," said Barry Sloane, CEO of New York-based Newtek, a CUNA strategic alliance provider that offers cloud services to credit unions including data storage. "By hosting apps in the cloud, you are effectively renting, not purchasing."

The payoffs may be big for the institutions that embrace cloud, suggested Jeff Irby, a vice president at Unisys, an IT firm in Blue Bell, Penn. "Cloud computing levels the playing field. It can bring capabilities that didn't exist in small institutions. This is really new."

Irby said advanced information technology processing and services that had been beyond the budgets and talents of small institution IT staff may be affordable on a pay as you go basis. Still, he believes credit unions may eventually make more use of cloud computing than do many banks because the model is ideally suited to their size. Meanwhile, credit unions have been slow to adopt, Shapiro said.

"We are getting a lot of traction with cloud solutions among community banks. Much less with credit unions."

Of the 570 credit union customers at Hyland, fewer than 50 are using cloud solutions, Shapiro noted. That is all the more baffling since the Federal Financial Institution Examination Council issued a statement on cloud computing in late June that essentially said there is no need for additional regulations around cloud computing, said Ben Reeser, senior architect at Computer Services, a core processing and services provider in Paducah, Ky.

The FFIEC stressed that it's incumbent on the institution to do due diligence and to practice thorough vendor management.

"The fundamentals of risk and risk management defined in the IT Handbook apply to cloud computing as they do to other forms of outsourcing," the FFIEC guidance read. "Cloud computing may require more robust controls due to the nature of the service. When evaluating the feasibility of outsourcing to a cloud-computing service provider, it is important to look beyond potential benefits and to perform a thorough due diligence and risk assessment. 

If cloud computing can pass FFIEC muster if the adopting institution follows certain guidelines,why aren't credit unions stampeding into cloud computing? 

"They are old school," said Rob Rubin, a cloud expert with consulting firm Novarica in New York.  "It takes them longer to adopt new technology. They are very concerned about moving sensitive information into the cloud."

Some credit union executives have said they just don't trust the security of the cloud. Rubin acknowledged the pervasiveness of that concern but he's noticed a shift.

"Cloud computing has to come to credit unions. To compete they need to be more agile," Rubin offered. "Cloud computing will also allow them to control IT costs."

The reality is that at some credit unions, the likely decision may be to ease into cloud computing. As for where they are more apt to take the plunge, some experts point to email.

"Commoditized apps will start moving over to the cloud and email usually is the first," said Antonio Piraino, chief technology officer at ScienceLogic, an IT monitoring firm in Reston, Va.  

Ironically, an unexpected area that is already seeing significant credit union usage is cloud-based security, said Mike Flouton, a vice president at Perimeter E-Security in Milford, Conn., which claims some 325 credit union customers, many of which are signed up for Perimeter's cloud based security suite.

"Credit unions are getting that it can be secure and it can give them real flexibility."