The Developing Case for Cloud in Operational Risk Management
The financial services industry is subject to a great deal of regulatory scrutiny and concern around data security. Long meant that risk management was not an appropriate match for cloud migration in the usual sense. That’s changing.
Now, cloud-based models are being used throughout the whole value chain of financial services—even for tasks that, up until quite recently, hadn’t been a part of the trip to the cloud, such as operational risk management. One indicator that this is the case is the fact that 82 percent of those who participated in a poll of banks agreed or strongly agreed that cloud-based deployment is the direction in which they will be heading in the next five years.
The use of cloud computing is becoming more popular among financial institutions (FIs) as a means of increasing openness, boosting speed and agility, and simplifying connectivity with both internal and external ecosystems. Institutions in the banking, insurance, capital markets, and asset and wealth management industries are increasingly adopting a cloud-based approach to operational risk management as the industry moves in that direction.
Why should one start managing operational risks in the cloud now?
Historically managed with on-premises solutions, operational risk management in the financial services industry consists of risk functions such as anti-fraud, anti-money laundering (AML), cyber security; governance, risk, and compliance (GRC); know your customer (KYC); regulatory change management and reporting; suitability and conduct management; and trade surveillance. Financial institutions are shown a greater (though still cautious) inclination to migrate these services to the cloud as cloud providers make major investments in bolstering data security and privacy over the cloud and extending global availability.
Even while regulated businesses like banking and financial services have trailed behind in the cloud computing race in the past, the cloud imperative is now more obvious than it has ever been. A portion of this acceleration was driven by the pandemic, as digitalization trends picked up steam, as businesses rushed to connect disjointed procedures and compartmentalized operations, and as financial institutions resorted to the cloud to promote cooperation among personnel working remotely.
Evolving financial regulations:
The price paid for non-compliance is quite high. The functions that are exposed directly to customers are undergoing a digital transformation within financial institutions. Despite this, banks continue to rely on a large number of risky manual operations, which leaves them subject to operational hazards. This may be ascribed to issues such as a lack of agility, reluctance to embrace an innovation mentality, a fear of taking risks, a restricted emphasis on the customer journey, and limits in IT design and the implementation of new technologies. In recent years, financial institutions all around the globe have been in the spotlight for their inability to effectively manage operational risk. The majority of these instances were caused by errors that might have been avoided in the transaction processing.
What exactly is cloud migrating anyway?
The process of migrating digital assets like as data, information technology resources, and applications to infrastructures that are hosted on the cloud is referred to as cloud migration. Businesses that are considering a move to the cloud often have the goal of modernizing their IT infrastructure. They aim to shift data onto the cloud from conventional infrastructures such as computer rooms, IT suites, and data centers. Managed Cloud Migration Services is becoming the platform of choice for an increasing number of businesses.
Cloud computing provides businesses in every industry a plethora of benefits that may be accessed via the migration of their data and apps to the cloud. The following is a list of key advantages of migrating to the cloud:
1. Seo friendly costs
Most firms operate with very limited financial resources. Moving your business’s operations to the cloud is one of the most efficient ways to save costs and lower IT overhead while simultaneously gaining access to more cutting-edge software and services. When you utilize the services of a cloud provider, you will only pay for the services that you really use. You also have access to the benefits without having to set up an information technology department or recruit a group of IT specialists.
2. Extensibility
Because cloud computing is so highly versatile and adaptable, it is well suited for use by companies that are expanding their operations. In addition, cloud resources automatically scale down when there is less demand for them. It is possible for businesses to rapidly scale up in response to expansion and larger amounts of work. The approach is far less complicated and considerably quicker than the conventional ways.
3. Integrated Tracking and Status Display
Several of the Managed Cloud Migration Services that are available to users are able to do monitoring in order to alert users in the event that an application or machine is experiencing potential problems or is really suffering an outage. When compared to the alternative of monitoring the status of your services on your own, this, of course, may help you save a significant amount of time.
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