Comparing Cloud and On-Premise Bank Tech Security, Costs, and Accessibility

The technology market has grown exponentially, which has resulted in there being a wide variety of risk and compliance management solutions available for banks. This is a fantastic situation for banks, the variety of solutions available means that there is a solution that works perfectly for almost every type and size of bank. There are compliance and risk management solutions which are designed for mid-size to large banks, and there are solutions which are aimed at effectively generating ROI on risk management for smaller banks. However, before a bank select a particular solution to implement, the first question that arises is whether the bank should implement an on-premise solution or should it go in a cloud-based solution.

Cloud based solutions have become very popular over the past two decades. However, the acceptance of cloud computing is different in different industries. When risk and compassion technology first appeared, it was mainly aimed at some of the largest banks in the country. The first few solutions were on premise solutions that were often designed to order. These solutions cost hundreds of thousands of dollars to implement and maintain every year. This has created a culture of on-premise solutions in the banking industry.

Comparing cloud solutions with on-premise solutions on the basis of security, costs, and accessibility highlights the advantages that cloud solutions can provide to banks of any size.

Security

Security is one of the major concerns that bankers often have about using a cloud solution to manage risk and compliance. The fact that risk and compliance data will be stored on the cloud and not within the banks own servers may seem to be a vulnerability of the system. The reality is that cloud solutions can provide better security then most internal networks being used by smaller banks. There are several reasons cloud-based solutions are more secure that local on-premise solutions.

The biggest differentiator is that the cloud solutions are being managed by software vendors who are experts when it comes to it security. A cloud solution provider which has hundreds of clients across the country will have a department dedicated to the security of client data. On the other hand, we cannot expect every small bank to have a whole team dedicated only to data security. Another major advantage of cloud solution is that it is much harder to break into them through social engineering.

Costs

When the cost of cloud solutions is compared to on premise solutions, it becomes apparent that cloud solutions can provide the same benefits as on-premise solutions at a fraction of the cost. Often the cloud solutions will provide more benefits and functionality while having a lower cost of both implementation and maintenance. When a solution is implemented on premise, the bank needs to procure the hardware required to run the solution and then a team is sent by the vendor to implement the solution. All these costs are borne by the bank.

Cloud solutions, on the other hand, do not require any local hardware because they are running from the cloud. Instead of paying for a team to come to the bank and implement the solution, the implementation is done on the vendor side. Similarly, maintenance of the cloud solution is also handled by the employees working for the software vendor. The lack of any hardware requirements, a significant decrease in implementation costs, and the maintenance being handled by the vendor themselves reserves and cost savings across the board for banks.

Accessibility to Collaboration

There really is the competition between cloud solutions and on-premise solutions when it comes to accessibility. As expected, cloud solutions can be accessed from any device that has an internet connection. This means that employees can access important risk and compliance information and complete any important work from anywhere in the world if they have the right credentials and an internet connection.

Accessibility to collaboration has always been touted as one of the strongest selling points for cloud solutions, but it was not given a lot of importance in the banking industry. While other industries have been using work from home policies for a long while, most banks only allowed their employees to work from the office. This meant that everyone usually works from their own computers on their own desks. However, the shutdowns caused by the pandemic have significantly increased the importance of accessibility in the banking industry. Banks now want to make sure that critical compliance and risk tasks will be completed even if the employees cannot come to the office.

Since cloud solutions are so easy to implement, it is also easier for banks to procure a small tool or module from a cloud solution to test the performance of the solution before the full solution is purchased. If your bank is looking for ways to improve risk and compliance management then get in touch with our risk and compliance experts for a demonstration of what our cloud technology can do for your bank.