Cloud technology is an already trending business initiative now exacerbated by the global pandemic. According to a report by Gartner, the cloud technology solutions market is forecasted to reach $364 Billion in 2022, up from $242.6 Billion in 2019. Ninety percent of enterprises expect cloud usage to exceed prior plans due to COVID-19. Further, 61% of organizations plan to optimize existing use of cloud, making it the top initiative for the fifth year in a row, according to Flexera.
Businesses continue to embrace cloud-based solutions, and 36% of companies spend more than $12 million per year on public clouds. With that kind of popularity, cloud technology myths and misconceptions tend to form. So, your bank or credit union should be aware of common misconceptions about cloud technology that may be holding you back.
Cloud Tech Misconception #1: It’s Unreliable
Your banking users expect your digital banking platforms to be completely functional, regardless if they’re accessing it via desktop or your mobile app. They want zero downtime. Understandably, you should be cautious about anything that can interfere with your user’s experience. However, cloud migration can make your system more reliable by reducing downtimes and mitigating data loss risk in the future.
Capital One, one of the largest banks in America, successfully reduced development environment build time from several months to a couple of minutes after migrating to the cloud. According to Chris Nims, SVP of cloud and productivity engineering at Capital One: “Going all-in on the cloud has enabled both instant provisionings of infrastructure and rapid innovation. We are able to manage data at a much larger scale and unlock the power of machine learning to deliver enhanced customer experiences.”
Cloud Tech Misconception #2: It’s Unsecure
Another pervasive misconception is that cloud technology solutions are not secure. This misconception is generally the result of organizations replicating security processes that saw success in legacy, on-premises environments. Traditional firewalls, isolated teams and other previous practices aren’t as effective in cloud environments because the cloud is inherently different. Reliable cloud providers regularly upgrade their services following the latest industry standards and complying with regulations.
Many executives have cited the security of public cloud infrastructure as a leading barrier to cloud adoption. Cloud Service Providers (CSPs) have made significant investments to fortify their underlying security capabilities. A CSP’s business model depends on best-of-breed security and they have each invested billions in cloud security and in hiring thousands of top cyber experts. The sheer amount of time, knowledge and investment dedicated to securing their service is highly likely to dwarf any in-house IT equivalent. Interestingly, according to Gartner, up to 99% of cloud security failures through 2025 will be the consumer’s fault. The surprisingly high number of data breaches resulting from human error or internal threats are reduced in a cloud environment.
Cloud Tech Misconception #3: It’s Too Expensive
Cloud technology solutions economics is fast becoming a hotly debated topic. Does cloud computing cost more than in-house computing? As with many good debate topics, it depends, but probably not if you partner with the right team. Business decisions can often come down to dollars and cents. However, your bank or credit union now must consider your critical data and user retention in this digital information age.
That said, one of the most significant benefits of choosing a strategic cloud technology partner is there are no massive upfront costs as compared to setting up in-house tech infrastructure. You typically pay monthly subscription fees as you go. Upkeep, upgrading, uptime, security and support all fall onto the shoulders of your trusted technology partner. As a bonus, your team doesn’t have to waste precious time and resources troubleshooting issues.
The objective of adopting cloud technology is for your organization to advance and automate your processes running on-site to simplify infrastructure. In 2020, Emirates moved from on-premises to a cloud system. They sought ways to reduce hardware maintenance costs and more effective ways to respond to traffic fluctuations caused by the global coronavirus pandemic. Emirates expect to net a savings of $1 million every year after the move. It also increased the transparency of the organization, according to the head of e-commerce Erick Meunier.
Cloud Technology Solutions Are Not Going Away
Contrary to another misconception, moving to the cloud doesn’t mean settling for a one-size-fits-all product. Cloud tech solutions can be flexible. Scalable hybrid models of cloud transformation will allow your bank or credit union to see immediate benefits even as you continue to adapt and migrate legacy operations over time.
There are many cloud strategies to choose from, and cloud spend is only growing. Eighty-three percent of companies reported that cloud spend exceeds $1.2 million per year. COVID-19 had a significant impact on cloud adoption -and it’s doubtful to reset to pre-pandemic times. Multi-cloud continues to be the dominant strategy, adopted by nearly all survey respondents. The transition from legacy software to custom cloud adoption is a sound move for banks and credit unions seeking to be digital banking leaders post-pandemic.
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Marty Aquino has been a passionate writer on venture capital, technology, forecasting, risk mitigation, wealth and entrepreneurial topics since 2009. He is the founder of Carbonwolf Energy, a venture-capital firm specializing in world-changing and status-quo-defying technologies and people.
Gartner – Gartner Forecasts Worldwide Public Cloud Revenue to Grow 6.3% in 2020
Flexera – Flexera 2021 State of the Cloud Report
Atlantic Council – Four myths about the cloud: The geopolitics of cloud computing
AWS – Capital One Completes Migration from Data Centers to AWS, Becomes First US Bank to Announce Going All In on the Cloud
McKinsey – Leaders and laggards in enterprise cloud infrastructure adoption
Gartner – Is the Cloud Secure?
AWS – Emirates Flies High After Massive AWS Migration
CMS Wire – Why Moving to the Cloud Doesn’t Mean Dumping Your Legacy Technology