Finance is finding solutions in the cloud
How much of your business do you plan to move to the cloud? If you work in the financial sector, or run a transaction-heavy business, like retail, recent findings suggest cloud options are a must to stay competitive. Of course, the adoption of cloud technology also requires the availability of a fast, reliable fibre to the premises (FTTP) network.
According to a recent Gartner survey of 439 global financial executives, the adoption of cloud technologies in the financial sector is happening faster than expected. By 2020, 36% of enterprises will move more than half of their transactional systems of record to the cloud, and 93% expect to use the cloud for half of their enterprise transactions in the future.
The transition to the cloud is happening at financial organizations of all sizes, not only those with large IT budgets. In fact, the survey indicates that cloud adoption is greater for smaller organizations. Of the larger organizations surveyed, 40.4% plan to move to the cloud in the next three years, while 44.6% of smaller organizations have the same plans.
Finding the right infrastructure
Gartner predicts a “steady migration over the next five to 10 years” despite the fact that “cloud solutions are still developing, and do not have uniform capability to meet the needs of all verticals, company size, and local markets.”
To migrate to the cloud, financial institutions will need a network infrastructure that provides best-in-class security. Fibre optic internet is inherently more secure than other options. Its signal is difficult to intercept particularly within a Multiprotocol Label Switching (MPLS) – which is a type of data-carrying technique for high-performance telecommunications networks.
MPLS directs data from one network node to the next based on short path labels rather than long network addresses, avoiding complex lookups in a routing table. A fibre network also means that cloud security tools, sensors, and various other security mechanisms have the bandwidth and reliability to detect threats and act fast when escalation is required.
What is driving this change?
According to Microsoft, financial institutions are responding to “fierce market pressures – nimble disruptors, complex regulations, digital native customers.” These companies are looking to the cloud to help them enhance customer service, optimize operations, and drive innovation.
Customer expectations, in Microsoft’s view, change in pace with technology, which is why TD Bank is using Azure to help deliver exceptional customer service. This trend is driving change in other sectors. As retail banking customers benefit from cloud solutions, they will expect other businesses to up their game as well. For example, Microsoft’s Office 360 communications ensure that employees have real-time conversations with one another, even when branches are remote. This boosts productivity and promotes a collaborative work environment.
Cloud solutions can also have a more direct impact on operations. For example, UBS Investment Bank uses Azure for its risk management platform. This technology runs millions of calculations each day – which needs a huge amount of processing power.
Azure doubled the calculation speed and saved UBS 40% on infrastructure costs. This “means the firm can have more working capital on hand and employees can make quicker, more informed decisions for their clients.” This level of cloud deployment is only possible with FTTP connectivity.
What’s next for finance?
Microsoft cites product and business model innovation as a way to better leverage data and create new opportunities. An example is the Monetary Authority of Singapore, the Association of Banks in Singapore, and Microsoft, who are working together to leverage cloud solutions to use blockchain technology for clearing and settling payments and securities. This, according to Microsoft, is “a key milestone in Singapore’s ambition of becoming a Smart Financial Center.”
This emphasis on cloud technology has impacted vendors as well. According to Van Decker, "Vendors have responded with new and rearchitected platforms in the cloud, and most have de-emphasized their on-premises solutions, in favor of cloud implementations, which are more profitable for the vendors, while reducing the effort of local IT support."
With your competitors moving to the cloud, your customer expecting it, and your vendors focusing on cloud solutions, ensuring you have the bandwidth and network reliability to accelerate cloud adoption is one technological development you can’t ignore.
For more information on our fibre connectivity solutions, contact your Axia salesperson at firstname.lastname@example.org or 1-866-773-3348.