The Cloud Computing technology is digitally transforming many sectors. BFSI (banking, financial services and insurance sector is the prominent sector which is utilizing cloud technology due to the rise of mobile banking, fintech and virtual transaction services. A report by IDC, says that the banking sector is forecasted to spend $16.7 billion on public cloud services, growing at 23 per cent CAGR.
Despite various benefits of cloud computing technology, many financial institutions are hesitating in taking cloud technology. Here are some challenges which are delaying the adoption of cloud computing technology in the BFSI sector.
#1 Data and Security Privacy
Bank data are the most sensitive data and keep it protected from the cyber breach is utmost importance for banking sectors. The cost of a single record data breach has risen according to reports.
Be it any technology, security is the most important challenge. Data security incidents are inevitable but preventable. As technology evolves, so must security protocols. Organizations have to emphasize on threat and vulnerability detection in all spheres of the cloud. When considering industry-wide technology transformation customer-data confidentiality is to be placed at the core.
#2 Lost Productivity and Competitive Edge
Banking and financial institutions are eager to jump on the cloud bandwagon. But most organizations don’t have the expertise or financial capabilities to implement cloud solutions. Most banks are still grappling the decision of moving their monolithic legacy systems to the cloud. Running on legacy systems, organizations lose out on productivity benefits of cloud applications. In their race to cloud migrations, banks face hours or days of server downtime; affecting customers and employees simultaneously.
#3 Controlling Critical Business Applications
Handing control of your critical business applications and data is very crucial for every financial institution. Giving it off to third party cloud provider could reduce the ability to be flexible and agile. You’ll need to reach out to your service provider, putting yourself at their mercy. This is another why financial institutions are facing the challenge in the adoption of cloud computing technology. The thought of falling behind a critical update simply because you couldn’t make adjustments on the fly yourself is terrifying.
Financial institutions and cloud service providers should be in a tight partnership to adopt cloud computing technology. Cloud services providers must ensure that the right frameworks are being deployed, programs and processes are in the right place as financial services providers increase their usage of cloud services.