6 Reasons CUs Should Embrace Public Cloud Adoption for Their Financial Technology

Cloud services are transforming business operations in the financial sector and beyond. In a recent survey from Celent, more than half of financial institutions reported they expect to run their systems in the cloud within the next five years. Furthermore, the public cloud supports more digital and remote operations, making cloud usage likely to continue growing within the financial industry.

Generally, the public cloud refers to a type of cloud computing where resources are publicly available for subscription and consumption by an organization. Referred to by IBM as “one of the most important shifts in the history of enterprise computing,” adoption of the public cloud is growing as organizations become more familiar with the plethora of benefits the technology provides.

While some credit unions are exploring the benefits of the public cloud, others are hesitant to move toward a complete cloud migration. CSI’s 2021 Banking Priorities Executive Report revealed that nearly 60% of bankers did not have enough information about investing in the public cloud. Let’s explore common misconceptions that are associated with the public cloud and benefits to making the transition.

All or Nothing Approach

One of the most popular misconceptions about migrating to the public cloud is the transition must be made all at once. While there may be instances where that is the case, credit unions can establish a hybrid environment where some of the infrastructure remains on-premise.

The notion of an “all or nothing” approach deters many credit unions from considering the cloud, but the reality is many institutions already use cloud applications in their daily operations. Furthermore, credit unions with employees utilizing Office 365, Dropbox or a hosted core platform are already in the cloud.

Security Breaches

Since security breaches make the news often, many credit unions are concerned that the public cloud will leave them vulnerable to data breaches. Most breaches that do occur within a cloud environment result from misconfigurations, and such risks can be mitigated with proper security measures. For this reason, securing an institution’s data in the public cloud is vital.

Credit unions should approach a cloud migration strategy thoughtfully and with the proper security considerations in mind. By partnering with a cloud provider, credit unions can enhance their overall security by leveraging the provider’s existing frameworks and controls. Additionally, credit unions can ensure the proper configuration of their environments and maximize the cloud’s security benefits by working with the right provider.

Benefits of the Cloud

Once credit unions have a complete understanding of the public cloud and its capabilities, the benefits of migration become readily apparent. From accessibility to security, institutions hosting their IT infrastructure in the public cloud will experience:

• Security and Compliance: A secure, cloud-based infrastructure ensures compliance with regulatory requirements through proper configuration and security measures, providing institutions with peace of mind during daily operations and audits. By partnering with a public cloud provider, many compliance challenges and responsibilities are outsourced, allowing credit unions to utilize a provider’s established compliance framework. Additionally, most trusted public cloud providers have invested large amounts of capital in security measures that would be unattainable and unsustainable for most organizations maintaining their infrastructure onsite.
• Scalability: If it’s relying on physical servers, a credit union must anticipate future needs and scale operations to that fixed perception. By migrating IT infrastructure to the public cloud, institutions can start with what is needed and scale accordingly, which yields greater flexibility, agility and potential cost savings. A migration to the public cloud enables credit unions to effortlessly add more resources to their environment while enjoying cost efficiencies from the scale.
• Cost Efficiencies: Out of necessity, many credit unions buy as much infrastructure as its budget allows. This practice results in waste if the institution only uses a portion of the infrastructure purchased. With the public cloud, a credit union can purchase exactly what it needs at any given time and expand its infrastructure to support business growth when necessary. The potential cost savings extend to include all the benefits of a large environment, including built-in redundancy, availability and disaster recovery capabilities—allowing credit unions to reap the benefits of a managed IT environment without bearing the entirety of the expense.
• Highly Available: With a highly available infrastructure in the public cloud, a credit union will have a resilient and redundant IT environment. Even if a single server malfunctions, the redundancy of operations offered by the public cloud allow another piece of hardware to take control without negatively affecting the member experience.
• Agility: The public cloud also allows for easy incorporation of new services for members, increasing speed to market compared to other service delivery methods. With on-premise servers, a credit union could face weeks or months of waiting for hardware, installation and licensing before deploying a new service. However, a cloud-based infrastructure can launch the same service within hours or days.
• Accessibility: The public cloud is readily accessible, which presents a valuable benefit for credit unions managing a remote workforce. Institutions can use an increasing range of high-speed connectivity options to interact with cloud-based resources. With proper controls, these dispersed connectivity options become an extension of the institution’s private network as well.

Moving Forward With the Cloud

When determining when or if a cloud migration is the right move, there are several steps a credit union should take to save time and money. Reviewing technology annually and determining if a cloud version of an application exists is a helpful exercise. For example, an organization can move one step closer to a full migration by simply deploying Office 365.

Once a credit union does decide to switch to the cloud, it is important to reflect upon overall goals. Is the goal to execute a successful digital transformation? Increase workforce mobility? Once goals and desired outcomes are determined, credit unions should have a conversation with a trusted provider about the best way to achieve those outcomes using the technology capabilities available.

The public cloud benefits financial institutions by providing flexibility, scalable resources and nearly limitless capabilities to IT infrastructure. Looking ahead, credit unions should utilize the public cloud as another mechanism to achieve their goals.

Rachael Schwartz is Business Development Director – Managed Services for Computer Services, Inc., a core processor based in Paducah, Ky.