Cloud computing, a model for providing software as a service over the Internet, has the potential to revolutionize the way the financial industry develops, delivers, interacts with, supports and uses technology applications.
The cloud computing model will soon emerge as a primary — and most likely the predominant — mechanism for delivering mainstream technology applications. There will be no need for many of the servers, storage area network or network-attached storage devices, relational databases or an array of other third-party software and hardware that currently is housed in financial institutions' data centers.
More importantly, cloud computing will unburden today's overcommitted, understaffed in-house IT resources, who currently must evaluate, select, learn, install, integrate, manage and update the tech infrastructure. These resources can then be devoted to far more strategic tasks associated with helping the institution become more productive.
Initially, cloud-based applications will be phased in on the periphery for complementary solutions to a financial institution's core in-house systems.
The rise of Internet banking applications hosted in a cloud computing environment is a prime example of this trend. Ultimately, the cloud computing model will drive the wholesale replacement of applications that now run on in-house servers. This transition is inevitable. The architecture; delivery; maintenance and, most importantly, economics of cloud computing will prove irresistible. The costs associated with installing, managing and supporting client/server-based applications on premises in a financial institution are staggering. The model has the potential to eliminate most of these costs while delivering a more functional, reliable and secure suite of applications to the end user.
