Only about five years earlier, adopting cloud hosting technologies was considered to be a huge risk by financial firms. But things have changed now as business sectors which have been traditionally reluctant to embrace cloud technologies, like the financial sector, are now preparing to use the cloud. This can be seen particularly in the UK where regulatory changes meant to encourage greater competition have made it far easier to set up new banks. Another common characteristic of these new financial establishments is that they are all using cloud hosting solutions.

Companies belonging to the FSI or Financial Services Industry have always been doubtful about overhauling their legacy infrastructure and shifting data to the cloud. This is mainly because financial services happen to be a strictly regulated industry which demands very stringent privacy controls. Previously, public cloud providers failed to offer assurances on the kind of security or scalability which these businesses had demanded. But today, more and more providers are equipped to protect financial services data. So, in keeping with this recent trend, insurers, banks and many other financial services are slowly accepting the cloud. Many of the financial companies are currently showing much interest in operating digital, customer-facing mobile applications in the cloud. They are still not keen to shift the important backend applications like core banking systems and payments to the cloud. It is but a matter of time before these companies start using cloud hosting in these areas too.

What is interesting to see is that smaller start-ups which did not possess legacy infrastructure were keener to adopt the cloud. Cloud hosting offers major benefits in terms of flexibility, scalability, and reduced costs. Cloud hosting allows companies to scale up their resources and access tools whenever they need to. These are some of the key factors which have contributed to adoption of cloud applications:

• In recent years, most of the cloud services providers have matured a lot and they have successfully deployed privacy, security and compliance controls. Vendors are also using automation for avoiding manual errors which could harm companies. These have helped to ease the concerns of financial services since many businesses can now meet compliance and security objectives within the cloud, rather than their own datacenters.
• In the past few years, more and more IT personnel have gained valuable experiences in application migrations to the cloud. So, financial companies have also begun to recruit these professionals and those having expertise in cloud engineering and automation. Organizations have also actively started to teach cloud app development skills to their talented and interested workers.
• Another factor which has made possible this shift towards cloud hosting plans amongst financial companies is the reduced concerns about vendor lock-ins. The FSI worries, about getting tied up to a company on a long term basis because of vendor lock-in clauses has now faded. Container technologies and platforms which help in application portability have helped businesses to shift from one cloud vendor to another.
• When you move your apps to the cloud you will need upfront investments. Today, financial companies are finding out new ways to estimate their returns on this investment. For many of these firms, advantages of using cloud hosting are not limited to only cost cutting or moving on-site apps to a cloud; it is the capability these companies are getting to come out with newer products and innovative services. Now financial services can actually think of building apps using cloud architecture and shift data to a provider for running these apps.

So, the shift towards cloud hosting is not really a great leap for financial firms. Many of these businesses have already been using many apps in their routine operations without realizing this. For example, marketing teams use CDNs which is a cloud offering. The idea is to encourage businesses to use cloud hosting for both their existing and new applications. it is important for business owners to make this move happen by identifying which applications are capable of being shifted to the cloud. Not everything should be shifted however to the cloud. Financial companies have to chalk out a sensible roadmap to chalk out their journey.