A cloud computing service allows users to access powerful computers in remote locations on demand with hardware, software, and other services.
FREMONT, CA: Cloud computing refers to delivering computing resources on-demand (storage, applications, and processing power) over the internet. Cloud Computing uses the internet to provide hardware, software, and related services on demand from powerful computers based in remote locations. Cloud Computing offers nearly unlimited hardware and software resources over the internet on a pay-as-you-go basis, enabling innovation and increasing flexibility. Security concerns, the complexity of managing complex systems, and regulations within the markets they operate have traditionally discouraged banks from embracing cloud computing.
Various systems and processes in different business units are involved in the complex nature of bank operations. For example, most bank documents are stored in a record room/file room. Physical files are stored in a room, which makes them less resistant to natural disasters. Managing customer inquiries is challenging enough without worrying about document retention for each department. Also, managing all the files is very expensive, adversely affecting a bank's bottom line. The competitive environment in the banking industry has forced banks to reinvent their core operations, products, and services to meet market demands. Without such action, a bank may lose relevance to its customers, leading to fewer revenues and profits.
However, due to security issues and challenges, most banks still need to catch up to adopt Cloud Computing. Banks are reluctant to use Cloud Computing because of the following challenges:
Security: Security concerns hinder Cloud Computing adoption in the banking industry. Using Cloud Computing to store data or host applications limits a bank's ability to physically access the servers hosting that data. Over the years, many reports have found that insider attacks are the third biggest threat to Cloud Computing. Cloud Computing providers' employees, for example, may attack potentially business-sensitive or confidential data. A cloud computing provider may also store data from multiple customers on a single server to reduce costs and maintain efficiency. Data from one user may be viewed by other users, which can be very damaging in terms of confidentiality. Consumers entrust their data to banks, which shows very high levels of trust, so banks must ensure their data's security and confidentiality remain intact when adopting cloud computing.
Reliability: Reliability is another problem that needs to be taken into consideration. Cloud computing poses a challenge because it comprises many components, and many complicated interactions make it hard to analyze its reliability. Cloud computing is considered reliable when it can provide the services intended, even when some of its components fail. Cloud Computing cannot be completely fault-free, but a bank needs systems that are reliable and able to adapt to changing conditions. A lower reliability rate of a Cloud Computing system means that the provider and its customer(i.e., bank) are often disconnected. This will result in downtime outages of data, which will negatively affect the bank's profits.
