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The financial services industry is in turmoil – How do cloud strategies need to adapt?

The financial services industry is in turmoil – How do cloud strategies need to adapt?
07 Aug 2020

At the start of the year there was a lot of talk about organisations increasing their IT spend, particularly in the financial services sector. This strategy had to rapidly be adapted in light of the global pandemic, which shifted priorities and caused massive strain on the entire economic landscape. With many businesses forced to retrench, and large portions of the population left without an income, financial institutions in particular have been hard hit by the current pandemic. Instead of expanding their IT operations and adopting new, innovative technology, the focus has shifted to downsizing, optimising and automating processes. In this regard the cloud remains critical technology, but cloud strategies need to be adapted accordingly and it is imperative to ensure they are cost effective without jeopardising operational outputs. Adding to this, it is now more than ever, vital to ensure data is accessible and protected, which makes data management critical.

Keeping it cost effective

We all know that the cloud is the future, and the discussion has long moved on from ‘if’ to ‘when’. However, adoption has always been delayed in South Africa, along with other developing nations, largely because of the costs involved. The exchange rate is one issue that has always been a challenge, and in the current economic circumstances this is particularly relevant. The US dollar has reached an all-time high, making technology that previously may have been within budget now out of reach, making a multi-cloud strategy a prohibitive exercise. Financial services institutions are looking to ‘sweat’ their current assets in order to survive.

The reality, however, is that survival in these times also requires a company’s cloud strategy to be accelerated in specific areas. The pandemic and subsequent lockdown has forced a rapid adoption of mobility, which is a significant departure from the traditional manner of operations within financial services. Enabling a remote workforce has become essential, which in turn means that cloud technologies need to be adopted. The trick is to find the right strategy to enable current requirements to be fulfilled, while optimising cost and enabling a road map for the future to remain viable.

A strategy for the times

The financial constraints of the current climate, as well as lingering security concerns, are holding back cloud adoptions. A hybrid cloud approach is the most tangible solution to the challenges we currently face. Financial organisations need to perform a thorough investigation of their technology landscape, to identify what is critical to move into the cloud now (for example to facilitate a work from home workforce) and what non-critical data can be maintained in the current infrastructure in order to maximise the use of existing data centres.

Ultimately it comes down to what an organisation needs, given their current situation. There is no such thing as a one size fits all approach, but a hybrid cloud solution is the only viable option for the foreseeable future. Every company’s approach will be different, thus careful analysis of their environment, business needs and desired future state is of utmost importance. The cloud is vital to enable the necessary remote workforce, but it is imperative to ensure that this also does not impact on compliance and is still cost effective.

Data management is always a critical consideration

Regardless of the strategy that is adopted, data management remains crucial. It is not possible to simply flip a switch and move into the cloud, and migrations never go off without a hitch. Business continuity needs to be top of mind, which means data must be protected, accessible and recoverable. Data management tools offer this data protection, as well as tools to help integrate with the cloud provider, which is essential in a hybrid environment.

In addition, with a remote workforce introducing new risks, effective data protection becomes even more important, and the strategy must be adapted to suit. There are many vulnerabilities, from unsecured networks to physical theft, that need to be considered. Enforceable policies need to be in place to ensure compliance to corporate security and data protection practices, such as ensuring all data is saved in the cloud. It is also imperative to ensure that, should an incident occur, the employee can be brought back to a functional state in the shortest possible time.

Continuity now and in the future

Before now, most financial services organisations did not have a ‘work from home’ model at all. The traditional office space was tightly controlled and secure, but with the pandemic forcing people to work remotely, these controls have disappeared. Organisations need to relook their strategy and plans to ensure security, compliance, and data management is at the forefront, supported by meticulous implementation and maintenance.

As the world faces unprecedented challenges, financial services organisations need to be equipped to adapt their cloud migration strategies to suit budgets and requirements. The cloud remains critical, but it needs to be cost effective, ensuring data protection and accessibility, while supporting the continuation of the digital transformation journey once the economy becomes more fluid.