The world is moving to the cloud. Most businesses are already there. And yet, it seems that the investment management sector is sometimes reluctant to embrace cloud technology. The main concerns appear to be:
- Data sovereignty restrictions
- Loss of control
In some ways, this is understandable; a major transition like this is not without risk and when it comes to dealing with other people’s money, investment managers often prefer to stick with what they know. However, it’s helpful to look at what other industries are doing when it comes to cloud technology.
According to IDG’s 2018 Cloud Computing Survey – a study of IT executives at 550 US firms – 73% of companies have adopted cloud technology or plan to do so before 2021. Less than 10% would be delaying their cloud migration beyond that.
A study by Deloitte revealed the sector is taking some tentative steps toward cloud-based applications for differentiating processes, but there is clearly a distribution of perspectives about doing so.
While there are risks involved in all aspects of technology, cloud tech has matured to a point where the above concerns are almost redundant. Not only that, but moving to the cloud offers a number of benefits that can enhance your competitive advantage.
So what will it take to induce more in the industry to move to the cloud? Here are five very good reasons to make the move:
1: Moving with the times
It’s all about business modernisation. The cloud is perfect for this, because it provides a range of portfolio applications, infrastructure and services that are ready for use. You’re freed from system management while your cloud software vendor manages the application and invests in continual improvement to almost guarantee that an investment in the cloud will remain modern for the foreseeable future.
2: Shifting focus
Any investment you make in technology should have a direct line toward supporting your goals and objectives; in the case of investment managers, that means making the best decisions for your clients. Instead of spending money on hardware and software that has to be upgraded and managed, a move to the cloud means you can refocus your efforts on delivering value to your clients.
3: Reducing costs
It’s a myth that in most enterprise use-cases cloud tech is more expensive than on-premise solutions. In fact, moving applications, infrastructure, or platforms to a cloud model can create enormous savings. Obviously you don’t need a tech support team to fix problems, but the cloud is also scalable. On-premise hardware often needs expensive upgrades. Cloud service providers usually let you scale up and down seamlessly, and it’s their job to upgrade their systems meaning that you save money on costly and time-consuming hardware upgrades.
4: Improving flexibility
Because of its mobility, cloud technology means that you and your staff can work from any location, on any device. In a world where business is increasingly being conducted on smartphones, this flexibility is essential, especially in the investment management sector. You can log in from anywhere and access the data you need, enabling you to make decisions for your clients no matter where you happen to be. Cloud technology means you can monitor operations in your business effectively, and get real-time updates.
5. Enhanced data security
Storing data in the cloud is actually safer than on physical servers and in data centers. A breach of security in your physical business location can lead compromised data security if laptops or computers are stolen, and this is not something any investment manager wants. If your investment data is in the cloud, you can delete confidential information remotely or move it to a different account. Breaching the security measures that are built into cloud platforms is extremely difficult, meaning your clients’ data is much more secure.
With that said, it’s important that investment managers determine data privacy, security and regulatory compliance risks. The industry is subject to high levels of regulations and legislation, so enabling a successful transition to the cloud means ensuring data security and minimising cyber risk as much as possible is essential.
Cloud technology represents a giant leap forward in how your investment management business can secure and access your mission-critical information. It’s understandable that you might be somewhat wary about cloud technology – you might think of it as inherently risky – but the fact is that cloud technology is now a critical tool for businesses existing in an ever changing world. It’s well worth looking into how yours can leverage its many benefits.
Keen to learn more? We have a white paper that outlines three ways your business can gain a competitive advantage by focusing on the cloud.