Area of IT Research
Cloud computing is very commonly trending term in the Information Technology sector owing to the various benefits associated with it. It helps in increasing the effectiveness of an organization by reducing its operational costs and also by providing more innovative and unique products and services to an organization and is being extensively used in majority of the sectors owing to its advantages other than the financial service sector. As the financial service sector is highly regulated sector, therefore there has been no such urgency among the financial service sector to execute cloud computing in its daily business functions. The report focuses on the benefits which are correlated with implementation of cloud computing in the financial service sector and also discusses the various issues which are associated with its implementation in the financial service sector.
Area of IT Research
According to Oliveira, Thomas & Espadanal (2014), cloud computing is defined as a method which is used to deliver information technology services where resources are collected from internet from various web-based tools and applications instead of directly connecting to a server. In cloud computing, instead of storing the various data and information in hard disks or other storage devices, the cloud base storage in the form of cloud computing allows to stock the data and information in a private database. As long as the electronics device has access to the internet, it has the access to the data and the software programs that run on it.
The above mentioned technology is termed as cloud computing as the information which is being pervaded is available in “cloud” and it does needs user to be in a particular location in order to leverage ingress to information as the cloud computing technology allows users to work remotely. The company which provides cloud services allows a user to store unlimited data and information on a remote server and later access the data and information through the internet.
As stated by Rahimi, et al. (2014), there are different types of cloud computing namely software as a service, platform as a service and infrastructure as a service. In SaaS, the cloud service providers license a software application to their customers and the licenses are provided to clients through pay as you go model. In IaaS, cloud service providers deliver everything to the customers like operating system, servers and storages through IP based connectivity as a component of on-demand services. In PaaS, service providers provide a platform to the users for designing software which is delivered through the internet.
According to Rittinghouse & Ransome (2016), there are various advantages of using cloud computing among which the most important advantages to business organizations are self-service provisioning as the users can spin up entire resources for all kinds of demands, as such elasticity of business organization can scale up when their computing need increase and similarly can scale down when their demand decreases and pay per use as the resources utilized by the users are measured at granular levels which allows the user to pay only for the resources that they have utilized.
Aspect of Society
Aspect of society
As opined by Cusumano, et al. (2015), financial services are defined as the economic services which are being provided by the finance industry and include a broad range of businesses consisting of managing money that involves banking institutions, investment fund, accountancy companies etc. Financial service firms are located everywhere in various regional, national and global financial centres.
The financial services industry, is leading in relation to revenues and equity market utilization. According to Armstrong, et al. (2015), the financial services sector is mostly dominated by the large conglomerates but the sector also involves various different ranges of smaller firms. The commercial bank are considered as the base of the financial services.
So as to understand importance of cloud computing in the financial service sector, researchers conducted extensive research on the various aspects of cloud computing and its implication. According to Gai (2014), the financial institutions across the globe which offers services to their clients and customers should non-hesitantly adopt cloud computing into their day to day operations as the digital transformation of financial institutions will help in bringing a new agility and will also enable an effective acceleration of company strategies by facilitating new digital workflows which enables effective collaboration between previously siloed business departments and with other businesses organizations or individuals with which the financial service organizations works with.
According to Nicoletti (2013), at the present time different financial service organizations have implemented cloud based SaaS application for non-core business processes such as financial accounting and Human Resources to offer improvement and increased comfort to the business therefore the top management are swiftly planning to implement the cloud based applications in their core applications.
The main motivation of the researchers only focused over various components of cloud computing and its application in various sector but the previous researches were unable to point out the particular benefits that only the financial service sector could enjoy.
As opined by Gai, et al. (2015), over the years financial services sector have been hesitant to overhaul their major Information Technology infrastructure and move their applications apparently to the public cloud as the financial services sector is a highly regulated industry which requires strict security and privacy controls. Until a few years ago the cloud service providers were unable to provide assurances to the financial service providers regarding the scale and time schedule which were demanded by the financial service sector.
However with the passage of time several public cloud service providers were able to accept to protect regulated financial services data and help speed responsiveness to the regulators, allowing the financial service organizations to set up and establish their business operations in other countries while meeting the regulatory requirements of the countries which have prompted various other financial service organizations such as banks and insurers to run their various non-core and core applications in cloud networks.
According to Chang et al. (2016), the main advantages which is associated with adopting cloud computing in financial service associations is the ability of the cloud computing technology to provide various types of innovative services in the marketplace such as various new types of investments, considering the fact that that products of the financial sector are rather abstract and therefore it becomes a core point of focus as their competitors too possesses the similar products which in turn helps in benefitting the financial sector organizations to attract more customers.
Types of Cloud Computing
The other advantage which is linked with association of cloud computing in the financial services is ability of cloud computing to remove costs as the main characteristics of cloud computing is to provide more efficiency to a business organization which in turn results in lesser operational costs.
Another area of interest in the research is the effort made to understand the current perception of the financial service organizations regarding implementation of cloud computing technology and accordingly comparing it with the actual reality so that it becomes easy for cloud service providers to design their offerings in response to the perceptions which has resulted in the better acceptance of the cloud computing services.
As stated by Gangwar et al. (2015), in accordance with the benefits offered by cloud computing, there are several other issues which are restricting them to move to cloud technology that includes compliance and security issues. As the financial service sector is being highly restricted by various regulatory bodies and organizations, therefore it becomes tough for them to gain compliance and support from the regulatory bodies and associations and in turn implement cloud computing technology in their operations.
Moreover according to Mahalle et al. (2018), the other major issue associated with the non-reluctance towards cloud computing is the security and privacy issues as financial service sector perceives cloud accounting as a platform with risks of cyber-attacks and cyber theft regarding various important financial data of the organizations but in actual reality cloud computing offers better cyber-security to the data and information stored in it than other IT tools which secures the financial service sector and their clients.
Conclusion
From the above report it is clear and evident that implementing cloud computing technology in financial service organizations helps in bringing unmatched flexibility to the financial service organizations and also helps in bringing the greatest value and speed in the financial markets. As the financial service organizations, are facing various challenges globally in the form of increasing demands of customers and shareholders and greater pressures to drive cost continuous cost efficiencies and increased regulatory requirements, therefore it is vital for financial service organizations to get rid of the various challenges by focusing on creating a new ecosystem which integrates the customers of the organizations with the with product-centric digital models and as a result cloud computing technology is considered to be the ideal solution for financial service organizations.
References
Armstrong, C., Guay, W. R., Mehran, H., & Weber, J. (2015). The role of information and financial reporting in corporate governance: A review of the evidence and the implications for banking firms and the financial services industry.
Chang, V., Kuo, Y. H., & Ramachandran, M. (2016). Cloud computing adoption framework: A security framework for business clouds. Future Generation Computer Systems, 57, 24-41.
Cusumano, M. A., Kahl, S. J., & Suarez, F. F. (2015).Services, industry evolution, and the competitive strategies of product firms. Strategic management journal, 36(4), 559-575.
Gai, K. (2014). A review of leveraging private cloud computing in financial service institutions: Value propositions and current performances. International Journal of Computer Applications, 95(3), 40-44.
Gai, K., Du, Z., Qiu, M., & Zhao, H. (2015). Efficiency-aware workload optimizations of heterogeneous cloud computing for capacity planning in financial industry. In Cyber Security and Cloud Computing (CSCloud), 2015 IEEE 2nd International Conference on (pp. 1-6).IEEE.
Gangwar, H., Date, H., & Ramaswamy, R. (2015).Understanding determinants of cloud computing adoption using an integrated TAM-TOE model. Journal of Enterprise Information Management, 28(1), 107-130.
Mahalle, A., Yong, J., Tao, X., & Shen, J. (2018). Data Privacy and System Security for Banking and Financial Services Industry based on Cloud Computing Infrastructure.
Nicoletti, B. (2013). Cloud computing in financial services.Springer.
Oliveira, T., Thomas, M., & Espadanal, M. (2014).Assessing the determinants of cloud computing adoption: An analysis of the manufacturing and services sectors. Information & Management, 51(5), 497-510.
Rahimi, M. R., Ren, J., Liu, C. H., Vasilakos, A. V., & Venkatasubramanian, N. (2014). Mobile cloud computing: A survey, state of art and future directions. Mobile Networks and Applications, 19(2), 133-143.
Rittinghouse, J. W., & Ransome, J. F. (2016). Cloud computing: implementation, management, and security. CRC press.
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