Why Credit Unions are Moving Toward Cloud Solutions
As the cloud migration market continues to grow, accelerated by the pandemic, more and more financial institutions are moving their digital assets off-premises. And credit unions are no exception. They bravely accept the challenge of the cloud revolution to keep up with banks, their larger and more powerful competitors, and meet the demands of the digitally savvy millennials. In the article below, we’re going to explore the reasons why credit unions choose cloud solutions.
Data security is a top-of-mind priority for every organization, but even more so in financial services, the sector with the second-highest average cost per breach ($5.72m) after healthcare ($9.23m). IBM claims that over the past year, security incidents became 10% more expensive and harder to handle due to the pandemic effect on the way businesses now operate.
Data security is also a matter of reputation and loyalty for credit unions known for trustworthy relationships with their customers. According to a 2021 survey by CSI and The Harris Poll, 45% of credit union members claimed they would resign their membership in case of a data breach. Therefore, even a minor security slip-up can cost credit unions not only huge financial losses but also pretty serious customer churn.
In an attempt to achieve 100% data security and avoid expensive reputation mistakes, credit unions opt for cloud solutions. Investing in the cloud is a great way for them to outsource a lot of security challenges and responsibilities to service providers. It gives credit unions peace of mind about their data. They can rest assured it is duly safeguarded and protected from unauthorized access.
As credit unions grow, they need more processing power, networking, and data storage capacity to handle the increasing pools of data. And while scaling with on-premises physical infrastructure may take weeks or even months and require heavy costs, the cloud makes the whole process easier, quicker, more cost-effective, and disruption-free. Cloud providers have all the infrastructure already in place and deliver it over the internet on a pay-as-you-grow basis. So credit unions can avoid buying costly equipment that can get out of date in a few years and pay only for the resources they actually use. This is also a great way for them to minimize e-waste.
Cloud solutions are also a more cost-effective option for credit unions. And the first reason for this is because, as we’ve briefly mentioned above, credit unions tend to squander on expensive hardware and software that get obsolete over time, require maintenance, and regular updates, and eventually need to be replaced. The beauty of going with cloud providers is that they keep hardware, operating system, and infrastructure up to date for you, and install the latest software fixes and security patches once they become available.
Investing in cloud solutions is a real cost-saving opportunity for credit unions also because maintaining a physical data center incorporates additional costs, such as utilities and rent. Moreover, statistically, a data center consumes 100 times more energy than an office building of the same size. Therefore, it’s also a great way for credit unions to reduce their carbon footprint.
Cloud solutions help credit unions make the shift to a work-from-home model easier and smoother by providing their employees with any time, anywhere, and any device access to centralized data, applications, and tools. This greatly improves efficiency, enhances employee experience, and ensures seamless collaboration.
Cloud availability is probably one of the main reasons to move to the cloud in general, but especially in the financial services sector, where top-notch customer service is a top priority.
Using a highly available cloud infrastructure, credit unions will have an effectively running, resilient, and redundant IT environment. It means that even if one of its components fails, the system can automatically switch to a redundant, fully functioning component without any disruption. This allows credit unions to offer a seamless customer experience and make financial services and products available to their members on a 24/7 basis.
Since availability largely depends on the reliability of cloud services, it’s crucial for credit unions to choose a provider that guarantees 99.99% network uptime. Read more about how to choose a service provider in our article on creating a cloud-based trading platform.
Harness the Power of Cloud Solutions in Your Credit Union
Whether and what exactly to move to the cloud is a tough question that most businesses and organizations have been recently facing. And there’s no single answer to it. If you consider shifting to cloud solutions in your credit union, define your overall goals first. Do you want to improve workforce mobility? Or enhance data security? Once you do that, you might want to build a cloud migration strategy. It will help account for all the potential risks and examine all tangible and intangible benefits to your organization.
Softarex delivers all-encompassing cloud computing services — from consulting and strategy to development and implementation — to businesses of all sizes and kinds. Feel free to contact us, if you need help with moving to the cloud.