Banks are built on extensive IT architecture that process enormous amount of data on a daily basis. To keep this data intact with easy search capabilities, cloud computing seems to be a cost-effective and optimal way to deliver business applications and services. Till date, cloud hosting has become a multibillion-dollar business, expected to touch much bigger figures in the approaching future.

To be honest, the rampant digitalization of services is also mounting pressure on banking sector to join hands with the buzzing technology. According to Gartner, by 2016, poor return on equity will drive more than 60% of financial segments worldwide to process majority of their transactions in the cloud.

Cloud computing can offer financial institutions a host of advantages, including:

Cost savings with Pay-as-you-go model: With cloud, banking sectors can trim down operational cost easily. There is no need for paying heavy amount on software and hardware equipment as the Cloud allows financial institutions to avail compute and other resources required on a pay-as-you-go basis.

High Performance: The cloud gives banks the flexibility to respond quickly to the changing business needs. It expeditiously enables scaling of resources for the swift flow of business operations. Additionally, it makes it easier to implement new applications and technologies to develop and launch product/services at a faster pace. Apart from easy integration, it allows corporates to access bank systems from anywhere in the world.

Business Continuity: Cloud computing not only empowers financial firms to meet demand peaks and provide the latest treasury solutions; however, it also provides fault tolerance, data protection, and disaster recovery for uninterrupted business operations.

Cloud computing also allows businesses to move non-critical services to the cloud, like software patches, maintenance, and other maintenance tasks allowing financial firms to focus more on core business imperatives, not IT.

However, before shifting gears to the Cloud, banks must consider problems around data security, confidentiality, regulatory compliance, and quality of services.