Which Cloud Deployment Model is Right for Your Financial Institution?
Cloud computing has become an essential component for modern banking. In fact, the American Bankers Association (ABA) estimates that more than 90% of financial institutions maintain at least some data, applications, or operations in the cloud today.
If your bank or credit union is in the remaining 10%, this blog post will help you understand the significance of cloud services on your banking operations, and identify which hosted deployment model may work best for your institution’s unique needs.
The Case for Cloud Adoption
Hosted banking software solutions deliver tangible benefits for both your institution and account holders, including:
- Increased scalability and operational efficiency
- Lower total cost of ownership
- Reduced IT structure complexity
- Safe and secure data management
- Improved compliance
As cloud computing becomes more mature, advanced security measures that protect data and applications are commonplace, along with features that support regulatory requirements. However, each type of cloud offers different benefits and risks, which need to be evaluated in parallel with your institutional goals and objectives.
The 3 Flavors of Cloud Banking
A private cloud is designed to be used by a single financial institution and maintained within a private network. Private clouds can be hosted in a bank’s or credit union’s data center, or hosted by a third-party.
Offering the most control over your data and security than other deployment models, private clouds allow you to customize your infrastructure to address unique compliance needs. If your institution is looking to have the most control over its environment and platforms, a private cloud may be right for you.
In contrast, a public cloud is managed and supported by a third-party, shared with multiple organizations over the Internet. All hardware and software are owned and managed by the cloud provider and space within is offered on a subscription basis. Common uses of public clouds are often for non-critical purposes like file sharing, email services, and application development and testing.
Financial institutions who are looking to leverage hosted solutions quickly and at a lower cost may find a public cloud the right fit for their bank or credit union.
Within a hybrid cloud, your bank or credit union can leverage the benefits of both public and private cloud infrastructures, where data and applications can move between the two environments. For example, sensitive account holder and institutional data can be stored within a private cloud, while less sensitive information can be stored in a public cloud. By configuring access to both environments based on your requirements, your bank or credit union can mitigate the data security risks often found with public environments. If your institution is seeking to have control over its environment but keep costs lower, then a hybrid cloud may be best.
Regardless of the type of cloud your institution selects, scalability, efficiency, and cost savings will be seen as compared to on-premise deployments. Always up-to-date, reduce down-time and remain competitive.
Why Choose Alogent Cloud for Your Needs?
Not all private clouds are created equal. Alogent Cloud is a multi-tenant, dedicated private environment that allows you to focus on user engagement, while leaving the heavy IT lifting to us. With limitless scalability and third-party connectivity, gain access to Alogent software and solutions in real-time, and benefit from measurable returns in cost savings, efficiency, and service level gains.
Where is your institution on its modernization journey? Contact Alogent today to discuss your bank’s or credit union’s needs and the benefits of hosted solutions.
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