Vendors are building solutions that simplify complex on-premise processes by deploying business applications through the cloud. But real-world cloud adoption continues to lag behind the market hype. As more institutions come to understand the real benefits the cloud delivers, adoption will continue to grow.
By some estimates, cloud computing spending among will approach $100 billion by next year. That’s a pretty big number and while I’ll leave the market prognosticating to the experts, I do see cloud adoption gaining steam among credit unions for some specific and important reasons.
Organizations who best serve credit unions understand that this target market often lacks the resources, time and expertise to address complex solutions, as compared to their large banking counterparts. While credit unions may want and need the latest in services, the challenge for vendors is to provide solutions that also meet the special requirements of credit unions, including the institution’s ability to deploy, manage, and maintain these services. The cloud provides a low-cost, low-hassle vehicle for companies to deliver their solutions in a way that is manageable for smaller financial institutions and provides key business benefits as well.
For example, cloud-based solutions deliver many benefits for the credit union market. With a traditional on-premise solution, credit unions first have to take the time to get infrastructure systems (such as appliances) up and running before they can start using the solution. Often times, physical rack space for on-premise infrastructure can be a problem or will become a problem as more appliances are added. Appliances and operating systems also require maintenance and labor, as well as additional power and energy to keep things running. When working with cloud solutions, the opportunities for services and cost savings for credit unions are limitless, as compared to physical solutions.
A significant advantage cloud solutions and applications have for credit unions are in deployment. Cloud applications can begin to be deployed the instant a credit union signs up and gets its account. As a specific example in set up, credit unions add users into the system, select the authorities that the organization must comply with and optionally setup the vulnerability scanner. Once that is complete, a cloud-based service that typically takes months to be up and running if on-premise is deployed immediately and the user will begin benefiting from the service.
Further reducing costs, with many cloud solutions, credit unions won’t incur the expense of hardware and third-party software. And when the business grows, the credit union doesn’t have to upgrade infrastructure to support their needs, further reducing the ongoing support effort and costs. Also, credit unions can pay for only what’s used (pay as you go) with cloud solutions, and purchasing additional resources as business requirements change is nearly instantaneous, with the benefit of easy and instant scalability. Along with cost savings, a significant business advantage cloud solutions deliver is the ability for credit unions to be extremely agile and responsive to changing demands. With a cloud service, institutions also benefit because the solutions can be updated over the cloud instantly, without having to wait for timed software and hardware releases.
In addition to deployment, cost and implementation benefits, cloud services provide for some added conveniences, too. For example, with a cloud service credit unions can have secure access to cloud applications from anywhere, without worrying about networking or firewall access issues. This is especially advantageous for credit unions with multiple locations, or when people are remote.
All financial institutions have some level of similar needs when it comes to technology around security, productivity and efficiency. While large banks have the staffs and budgets to handle and manage traditional solutions, cloud-based services offer some unique advantages for all businesses, but especially for smaller banks and credit unions, including when it comes to costs and agility.
Dariel LeBoeuf, is executive vice president of sales and marketing at TraceSecurity.
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