As we enter the Fourth Industrial Revolution, there is no doubt that cloud technology is transforming the way we live and work. The cloud has revolutionised the way businesses operate, providing more efficient ways to store and process data, as well as enabling access to new business models and opportunities. “The cloud is the great leveller, giving small businesses access to technologies previously only available to large corporations.” – Marc Benioff, CEO of Salesforce.
It is important to emphasise that the concept of cloud technology has been around since the era of shared central processing systems. In the past, companies shared central systems with other organisations to store and process data. The introduction of client/server computing in the 1980s and 1990s allowed organisations to store and process data on their own dedicated servers, which reduced the need for shared computing space. However, this also resulted in an increase in Information Technology (IT) infrastructure costs.
The introduction of cloud computing in the early 2000s changed the game once again, allowing businesses to access computing resources on demand, without the need to invest in their own IT infrastructure. This shift in technology allowed businesses to focus on their core competences and reduce costs.
“Cloud computing is not only the future of computing, but also the present and all of computing’s past.” – Larry Ellison, co-founder and former CEO of Oracle.Jaikumar Sathish – Director of Information Technology at Absa Bank MozambiqueThere are three types of cloud: public, private and hybrid. The public cloud is the most commonly used form of cloud computing, where computing resources are made available, to the general public, over the Internet. The private cloud is used by a single organisation and is not accessible to the public. The hybrid cloud is a combination of the public and private cloud, where computing resources are shared between the public and private cloud.
As cloud technology evolves, new business models emerge
According to Ginni Rometty, former CEO of IBM, “the cloud says how you do computing, not where you do computing.” This quote highlights the fact that the cloud is more about the method of computing than the physical location of data.
But with cloud transformation comes new challenges, especially around regulation and risk mitigation, and many regulators share the same concern.
“I am concerned that we are still not paying enough attention to the risks associated with cloud outsourcing, particularly in relation to concentration risk, systemic risk and cyber risk.” – Andrea Enria, Chair of the European Banking Authority (EBA) Many countries have implemented strict data protection laws, which may affect the adoption of cloud technology by firms operating in those jurisdictions. Therefore, it is crucial that companies understand the regulatory landscape in each country they operate in to ensure they are compliant with
local laws. In addition to the regulatory challenges, there is also a constant concern about the security of cloud technology, especially as it relates to the storage of sensitive financial data. This is where banks and regulators come in, as they have a vested interest in ensuring the security and stability of the financial sector.
To mitigate these risks, central regulators have implemented guidelines on the use of cloud technology by financial institutions. These guidelines may include security, data privacy and data protection requirements, in addition to the need for independent audits to ensure that cloud providers meet these requirements.
Another solution to mitigate these risks is the use of private cloud solutions, allowing financial institutions to store and process their data on dedicated and highly secure servers, reducing the risk of data breaches.
Despite these concerns, many financial institutions are already adopting cloud technology to improve their operations, allowing them to mitigate the risks associated with this technology and take advantage of the benefits it offers.
The benefits of this technology for the financial sector are significant. For example, it can help financial institutions reduce costs, improve the customer experience and increase the speed and efficiency of their operations, while facilitating innovation and the launch of new products and services.
The benefits of cloud technology are not limited to the financial sector. It has the potential to transform many other industries, such as healthcare, education and retail. According to Marc Benioff, CEO of Salesforce, “Cloud services companies fit all sizes… The cloud is for everyone. The cloud is a democracy.” This quote highlights the fact that this technology is accessible to all businesses, regardless of their size.
However, organisations should pay special attention to the cost management of this technology. If not managed well, cloud technology can become financially unsustainable. Organisations should understand their usage patterns and optimise their usage to avoid overspending.
The future of cloud business models is also evolving rapidly. As cloud technology continues to evolve, new business models are emerging, such as serverless computing and function-as-a-service. These new models are changing the way businesses utilise cloud computing and driving innovation and efficiency.
In conclusion, cloud technology is transforming the way we live and work, and the financial sector is no exception. While there are challenges around regulation and risk mitigation, the benefits of cloud technology in the financial sector are significant. With the use of appropriate security solutions and private cloud options, organisations can mitigate the risks associated with this technology and reap the benefits it offers.
It is also important for organisations to understand the different types of cloud computing and carefully manage their costs. As this technology continues to evolve, new business models will emerge, and organisations must keep up to date with the latest trends to remain competitive.
