Countless organizations are realizing the benefits of cloud-native IT solutions and infrastructure. According to Gartner, “Successfully migrating workloads to the cloud means delivering maximum benefits with minimal effort and costs.” This applies to financial institutions (FIs) and other financial firms, where public and private cloud environments offer a host of benefits that are especially important for hedge funds, quant funds, private equity firms, and others.
But while the benefits of the cloud are well established, cloud migrations can be a daunting task for firms that have relied on on-premises IT infrastructure for years. “By nature, cloud migrations are messy,” Forbes describes. “Part of the problem is that applications, systems, and data take on radically different shapes and forms in the cloud compared to legacy systems.” Fortunately, by working with a provider that specializes in managed cloud solutions, financial organizations can migrate more quickly and easily than if they attempted to do it on their own.
This article provides insights into how financial firms can migrate their IT infrastructure to cloud environments. It also demonstrates the value of working with a provider for managed cloud solutions, and the steps financial firms can expect to take as they transition away from their on-premises IT infrastructure and technologies.
Why FIs Are Turning to Cloud Infrastructure Today
Migrating to the cloud is a critical step for financial services organizations seeking to improve performance, agility, and efficiency. That’s because cloud infrastructure resolves many of the shortcomings presented by outdated legacy on-premises IT infrastructure. “By addressing common IT constraints, such as slow time to value, limited resources, and incompatible systems, cloud is an enabler of digital business,” says Gartner, where digital information and exchanges are increasingly central to financial firms’ business operations.
Specifically, cloud-native technologies “abstract away unnecessary complexities” so that IT team members can focus on creating better customer experiences and business outcomes, as Forrester describes. In other words, migrating to the cloud means IT professionals can dedicate more time to projects that create company growth and ROI, rather than spending that time on manual IT solutions, processes, and maintenance. Cloud infrastructure provides:
- Scalability: Financial organizations can quickly and easily scale up or down their cloud infrastructure in response to changing demand.
- Cost Savings: Financial firms can reduce the cost of hardware and software, as well as ongoing maintenance and support.
- Security: Modern cloud environments feature advanced security features such as encryption, identity access management (IAM), and other measures to protect data from malicious actors.
- Productivity: Cloud-based software can help financial firms streamline processes, such as budgeting and forecasting, trading analysis, and other financial activities. Workforces can leverage cloud applications from any location, helping them to collaborate more effectively and stay productive.
- Competitive Value: Migrating to the cloud can help financial firms gain a competitive edge by giving them access to and helping them scale new technologies in ways their competitors cannot.
Managed cloud infrastructure provides financial firms with benefits in terms of ongoing regulatory compliance as well. Specifically, public and private cloud providers can help financial firms apply stringent data protection measures mandated by GDPR and other regulations; they can proactively keep up with regulatory shifts that might require changes to IT software and infrastructure. Together, these benefits represent stark differences from the realities of legacy on-premises IT infrastructure, which continues to bog down countless financial firms and their IT staff today.
Common Pain Points When Migrating to the Cloud
Although adopting cloud infrastructure and cloud-native applications has tremendous advantages, it’s often difficult for financial firms to manage transitions to cloud environments alone. For example, “it’s difficult to identify dependencies because functions coded into individual applications now reside in widely used and often-shared containers,” as Forbes describes. Financial firms often lack technical expertise in-house as well; they may not know how to securely configure their cloud environment or establish the right monitoring processes to ensure performance and availability. Additional pain points include:
- Lack of a clear process: Financial firms often lack the time and resources to plan and execute complex cloud migrations.
- Cost uncertainties: Cloud-based pricing models are often hard to understand; financial firms may have difficulty predicting their ongoing cloud expenses or accurately budgeting for their cloud migrations.
- Lack of compliance: The complexity of cloud environments can make compliance challenging. Financial firms may also struggle to understand best practices for cloud security and privacy.
Working with cloud-based IT solutions provider companies can help financial firms simplify cloud migrations, ensure they have access to the latest technology, and establish a dependable cloud foundation for all operational due diligence. With the right cloud foundation, companies can enjoy “a potential eightfold acceleration in the pace of cloud migration and adoption and a 50 percent reduction in migration costs over the long term—without delaying their cloud program,” as McKinsey describes.
Five Steps to a Successful Cloud Migration for Financial Firms
Thanks to the scalable nature of the cloud, there are virtually no limits to the cloud-native capabilities financial firms of all sizes can access today. Upon identifying a successful cloud-native technology provider and migration partner, financial firms can begin the cloud migration process”
- Assessment and Planning: Financial firms should start by assessing their IT environment and applications to identify which are suitable for cloud migration. These assessments should also take into account the financial firm’s security requirements, budget, technology stack, and other criteria.
- Migration Processes: Financial firms must establish policies and processes for their cloud migrations. This includes understanding the difference between “lift-and-shift” migration strategies and refactoring applications to leverage new cloud capabilities; financial firms should understand which approach will best suit their needs.
- Cloud-Native Applications: Financial firms should determine which of their existing applications are suitable for cloud migration, then tailor the applications to leverage cloud-native capabilities; or, consider adopting new cloud-native applications for their teams.
- Monitoring and Automation: Financial firms should put processes in place for monitoring and automating their cloud environments. These solutions can help financial firms identify performance issues, detect security threats, and ensure compliance with applicable regulations.
- Security Protocols: Financial firms should establish security protocols for their cloud environments. This includes identifying potential threats, implementing appropriate access controls, and establishing encryption standards.
Leaders at financial firms should always consider the cultural, interpersonal, and business priorities of their organization before they begin discussing their migration internally. Putting your best foot forward for clients starts with the right skills and people; even if it takes the right technology to deliver their success.
Ensuring Your Longevity and Business Growth
The cloud migration process for financial firms is complex and potentially risky. But by partnering with a managed cloud provider, financial firms can ensure they have access to the necessary resources, expertise, and support for a successful cloud migration.
Partner with Option One Technologies for Your Migration to the Cloud
Option One Technologies specializes in cloud solutions for finance organizations, helping them to create the secure, reliable cloud environments they need. Our experienced team can help finance firms assess their IT environment, develop comprehensive cloud migration strategies, and transition to the cloud with minimal disruption. Contact us today to learn more about how we can help your firm.