# Cloud migration: Key considerations for financial services
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2019-09-11
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: 7 Critical Considerations for Financial Organisations
Meta Description: Discover the essential considerations for a smooth cloud migration in the finance sector, from strategic planning to secure data disposal.
URL: https://financedigest.com/cloud-migration-key-considerations-for-financial-serviceshtml

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By **Paul Mercina,** Director of Product Management, ParkPlace Technologies

More than ever, it is imperative for financial services organisations to migrate to the cloud. New demands from customers, along with increasing regulatory requirements, require organisations to have an IT ecosystem that can deliver increased agility, innovation and customisation.

![Paul Mercina](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/paul-1-450x450-1736838995233-compressed.jpg)

Paul Mercina

Yet, despite recognising the multiple benefits of cloud-based IT, many financial services organisations have been hesitant to make the leap, primarily because of security, [data privacy](https://www.financedigest.com/power-to-the-people-how-consumers-are-calling-the-shots-when-it-comes-to-data-privacy.html "Power to the people: how consumers are calling the shots when it comes to data privacy") and compliance concerns. The process of migrating IT systems to the cloud — while simultaneously ensuring ‘business as usual’ for [staff and customers](https://www.financedigest.com/mcdonalds-makes-masks-mandatory-for-all-customers-staff.html "McDonald’s makes masks mandatory for all customers, staff") — is not without its challenges. Here are seven [areas](https://www.financedigest.com/4-areas-of-finance-you-should-be-watching.html "4 Areas of Finance You Should Be Watching") to consider that will allow financial organisations to best reap the rewards, while making the process as efficient and straightforward as possible.

**Strategy before action**

Moving all your IT systems to the cloud may be appealing, but in practice, this is unrealistic. Not everything can or should be moved. Many [applications and services are still not optimised for virtual](https://www.financedigest.com/five-ways-bad-bots-are-trying-to-crack-your-virtual-vaults-by-erez-hasson-strategist-application-security-at-imperva.html "Five Ways Bad Bots Are Trying To Crack Your Virtual Vaults") environments, let alone the cloud. You will also need to [consider the order of migration and impact on operations](https://www.financedigest.com/europes-wizz-air-considering-a-saudi-operating-license.html "Europe’s Wizz Air considering a Saudi operating license") and staff. Considering your unique needs is critical to unlocking the benefits of the [cloud without compromising security](https://www.financedigest.com/the-future-of-finance-how-to-defend-against-the-top-threats-to-cloud-security.html "The Future of Finance: How to defend against the top threats to cloud security"), daily activities, existing legacy systems or wasting budget.

**Interim planning is critical**

The long-term plan may be to move 80% of your applications and [data storage to the cloud; however, in the short term, you will need to consider how you will maintain accessibility and security of existing data, hardware and applications during the migration](https://www.financedigest.com/normalizing-advanced-cloud-data-security-with-normalyze-from-amer-deeba-and-ravi-ithal.html "Normalizing Advanced Cloud Data Security with Normalyze from Amer Deeba and Ravi Ithal"). [Third party](https://www.financedigest.com/why-a-replacement-to-third-party-cookies-is-key-to-post-pandemic-recovery.html "Why a replacement to third party cookies is key to post-pandemic recovery") suppliers can help maintain legacy systems and hardware during the transition to ease disruption and ensure continuity of services.

**Careful disposal of legacy hardware**

[Cloud migration](https://www.financedigest.com/financial-services-industry-blazes-the-trail-for-cloud-migration-post-pandemic.html "Financial services industry blazes the trail for cloud migration post-pandemic") will inevitably involve the retirement of some hardware. It’s imperative to ensure any stored data is secured to [avoid](https://www.financedigest.com/the-race-to-avoid-data-dinosaur-extinction.html "THE RACE TO AVOID DATA DINOSAUR EXTINCTION") the risk of data breaches. Many organisations underestimate hard drive related security [risks or assume incorrectly that routine software management](https://www.financedigest.com/early-detection-of-mismatched-trades-is-key-to-managing-risk-and-maximizing-profits-on-the-pl-desk.html "EARLY DETECTION OF MISMATCHED TRADES IS KEY TO MANAGING RISK AND MAXIMIZING PROFITS ON THE P&L DESK") methods provide adequate protection. This is critical for financial services companies whose reputation relies on security and [data protection](https://www.financedigest.com/modern-data-protection-how-organisations-can-protect-against-cyber-attacks.html "Modern Data Protection: How organisations can protect against cyber attacks").

**Improved security**

Standing side-by-side with the previous point, information security remains the number one concern for the financial [services industry](https://www.financedigest.com/why-sustainability-presents-one-of-the-greatest-opportunities-for-the-financial-services-industry.html "Why sustainability presents one of the greatest opportunities for the Financial Services industry"). When correctly deployed, [cloud applications are no less secure](https://www.financedigest.com/dont-let-the-promises-of-virtual-desktop-security-cloud-your-judgement.html "Don’t let the promises of virtual desktop security cloud your judgement") than traditional in-house deployments. What’s more, the flexibility to scale in a [cloud environment](https://www.financedigest.com/how-to-manage-identity-in-a-hybrid-cloud-environment.html "How to manage identity in a hybrid cloud environment") can empower organisations with more control over security issues.

**Agile innovation and [competitive edge](https://www.financedigest.com/leveraging-ai-for-the-competitive-edge-in-insurance.html "Leveraging AI for the Competitive Edge in Insurance  ")**

Accessing the [cloud can increase a bank’s](https://www.financedigest.com/european-banks-cash-in-on-rising-rates-as-clouds-gather.html "European banks cash in on rising rates as clouds gather") ability to innovate by enhancing agility, efficiency and productivity. Gaining agility with faster onboarding of services (from the traditional two-to-three weeks to implement a [service to almost instantly in the cloud](https://www.financedigest.com/uk-to-examine-cloud-services-dominated-by-amazon-microsoft-and-google.html "UK to examine cloud services dominated by Amazon, Microsoft and Google")) gives financial services companies a competitive edge: they can launch new services to the market quicker and with security confidence. Additionally, the scaling up (or down) of services is fast and reliable, which can help to reallocate resources away from the administration of IT infrastructure, and [towards innovation and fast delivery of products and services to markets](https://www.financedigest.com/the-plant-based-snacks-market-to-move-along-the-lines-of-staunch-advocacy-towards-innovation.html "The Plant Based Snacks Market To Move Along The Lines Of Staunch Advocacy Towards Innovation").

**Cost benefits**

As organisations move from on-prem to cloud environments, costs shift from capex to opex. The cost savings of public [cloud solutions](https://www.financedigest.com/the-future-of-fintech-and-open-source-cloud-solutions-in-the-united-kingdom.html "The future of fintech and open source cloud solutions in the United Kingdom") are significant, especially given the reduction in initial capex requirements for traditional IT infrastructure. During periods of volumetric traffic, the [cloud can allow banks to manage computing](https://www.financedigest.com/the-future-of-cloud-computing.html "The Future of Cloud Computing") capacity more efficiently. And when the cloud is adopted for risk mitigation and innovation purposes, cost benefits arise from the [resultant improvements](https://www.financedigest.com/how-accountants-can-improve-financial-planning-and-results-through-open-banking-to-help-smes.html "How accountants can improve financial planning and results through Open Banking to help SMEs") in business efficiency. According to KPMG, shifting back-office functions to the [cloud allows banks to achieve savings](https://www.financedigest.com/could-the-cloud-save-the-world.html "Could the cloud save the world?") of between 30 and 40 percent.

**Short-term pain for long-term gain**

Although any large-scale IT transformation will undoubtedly cause some disruption, for those financial [services](https://www.financedigest.com/facilitating-open-finance-through-secure-services.html "Facilitating open finance through secure services") organisations looking to make the move, a sound migration strategy will be vital to success. While some organisations are understandably hesitant about the impact of cloud migration in terms of operational disruption and costs, it’s worth remembering that, in the long-term, moving to the cloud will allow all financial services organisations to [unlock the potential](https://www.financedigest.com/oil-firms-must-step-up-exploration-off-norway-to-unlock-potential-npd.html "Oil firms must step up exploration off Norway to unlock potential -NPD") of a more flexible, scalable and resilient IT system so they can focus on delivering improved services and increasing innovation.


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