In the context of core data processing, “the cloud” means more than just service bureau processing or a simple SaaS revamp.
Whereas service bureau processing and SaaS address how a particular application is delivered to a credit union, cloud computing focuses on the maintenance of hardware resources. A cloud-based core processing platform is really just a cloud computing environment in which your credit union can use software. It's a subtle, but important, distinction.
Those opposed to service bureaus claim that a credit union gives up control of its data once it outsources data processing. That's a valid argument — service bureau systems tend to be cookie-cutter, with limited customization options. On the other hand, you can deploy or maintain virtually any software in a cloud environment. This means that the credit union user experience – including customization — should be identical to an in-house system, because both environments run the same software.
How It Works
Cloud computing is made possible by advances in two critical technologies. The first is server virtualization, or the ability to provision multiple virtual servers on a single physical server. A cloud provider can provision a virtual server based on a credit union's current needs, easily adding more resources as needs require.
The second technology is bandwidth. Several years ago, two servers 500 miles apart could never deliver the same performance – the distance made it impossible to quickly move data back and forth. Today, that's no longer an issue.
Cloud Advantages
Cloud computing eliminates the need for a credit union to worry about hardware maintenance. Virtually any on-premise server is a candidate for cloud-based tasks — including mail, file and imaging server. Any application software running on the server can be migrated to the cloud.
Because cloud providers tend to base their operations in world-class data centers, credit unions also benefit from state-of-the-art data security.
Then, there's disaster recovery. Cloud servers are not exposed to the same conditions as your physical servers. Beyond that, a well-designed cloud operation is highly redundant. This means that if something should go wrong with one of your servers, the data can be available within a matter of minutes from a remote backup server.
Perhaps most important of all, cloud computing frees your IT staff from the mundane tasks of maintaining hardware, allowing them to focus on what they do best: serve your members.
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