Why is Cloud Paralysis becoming a major concern for Financial Institutions?

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Cloud Paralysis is a situation in which an enterprise fails to adapt and transform workloads or software to a digital cloud due to the continuous shift of the underlying infrastructure or the constantly changing and evolving technological change that is transforming the environment.

Everybody seems to be concentrating on the latest technologies being introduced, but it is incredibly unusual at the level of the company that we implement modern technology in manufacturing without any strong evidence that it is workable and safe. Evolution is not the only important factor, hence, along with the speed of the developments pacing up, it is becoming equally important for the organizations to adapt to the technology. Because of the speedy innovativeness in the technology, it is becoming difficult for the organization to choose among the vast options available. It is also very important for the organization to measure the reliability and safety associated with the technology.

Migrating to the cloud is an integral aspect of the willingness of conventional financial institutions to contend with digital-native Fintech’s. Innovation sets the framework for new, flexible goods and services, with enough versatility to adapt as business dynamics shift and consumers demand change.

And the transition is a high and intimidating initiative for banks. Whether it’s the difficulty of migrating complicated systems or deciding among the rising numbers of service providers to partner with, major banks have the concerns of work cut out to accept the cloud technology.

This is one of the major concerns which is causing the Cloud Paralysis. The banks are unable to opt among the large range of service providers. The customers, on one hand, expect the banks to improvise their quality of service along with the evolving technological advancements. On the other hand, the banks are facing major concerns regarding choosing one among the wide range of options available. Financial Institutions have a major concern when it comes to data Privacy and Security.

But stalling is no longer an appropriate tactic if Financial Institutions want to succeed in a new financial services environment. There are techniques that banks’ Chief Technology Officers can implement to overcome this cloud paralysis, but first and foremost, CTOs and other C-suite executives need to take the lead.

Banks’ cloud migration journeys were postponed amidst the competitor’s pressure from Fintech’s, as FIs waited for new tech to emerge and to ease their concerns about safety and privacy. Today, proof of the value of the cloud for banking activities is well understood, yet, digital transformation remains stuck.

It’s not a lack of evidence that is holding the banks back. It is more of something like a sense of confidence and leadership. It’s the concern about the uncertainty, and the complexity, according to Kassam, chief technology officer at NuoDB.

CTOs and other in-house executives do not have experience with the correct questions to pose or the appropriate way to steer their FIs to the cloud. The fact is, cloud adoption does not have to be a huge, one-time undertaking. When CTOs recognized why they should take small measures through the cloud, Kassam said that all of their main issues will be answered.

“There are various avenues you should talk of going into the cloud,” Kassam said, adding that whilst each bank will handle the transformation plan differently depending on its particular risk profile and technology experience, the easiest way to get started is always through a simple, stand-alone program.

It’s a strategy that doesn’t have to continue with a consumer-facing device. Through bringing a current isolated device and converting it to the cloud, or creating a new cloud-based product, FIs may make use of the technology to benefit from it.

For several companies, the need to select a cloud service provider from the get-go is another big concern. Yet there are other alternatives to the banking industry today, including Google, Microsoft, and Amazon Web Services (AWS). As Kassam clarified, banks will not have to pick a single vendor. Alternatively, with every program or mission being aimed for cloud migration, FIs may collaborate with various collaborators.

Having a cloud-agnostic service helps reduce the risk of dealing with multiple storage services, encourages banks to migrate between vendors quickly, and decreases running costs. This took some time, but the largest banks in the world are slowly gathering traction to conquer their cloud paralysis. Google revealed last week a multi-year cloud collaboration with Deutsche Bank to help FI’s digital transformation. Days later, HSBC announced that AWS will be his preference.

These contracts are the indicators that the banking industry is becoming more prudent in a cloud-based ecosystem, with Kassam anticipating an imminent “tip point” in which other FIs will follow industry heavyweights.

Although the CTOs and IT departments of banks are happy with these initiatives, external forces tend to place barriers in the path of modernization efforts. Today’s market uncertainty will be a relatively significant hurdle to resolving, with prospects of more economic strains expected to push banks to make tough choices on their capital investments.

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