It seems like every company is coming out with cloud-based solutions. And so it also seems like the right time to take a look at the good, the bad, and the ugly of migrating to a cloud-based solution.
The Pros of Cloud Computing
Removes the technology headache; allows staff to focus on other important tasks; no longer worry about functionality and software upgrades as they are taken care of for you.
Saves it. Money, that is. A cloud provider can offer their services at a lower cost because it has a large enough operation to afford skilled people and state-of-the-art technology than a small or medium-sized business can offer itself.
It’s easily accessible from anywhere with an internet connection.
The application is already up and running and the provider makes sure it keeps running. So once migrated, it’s instantly available for use.
The Cons of Cloud Computing
This is the most obvious threat and it largely depends on the service and delivery models of the providers. For investment management firms, the best practice is to select a provider who ensures that each client has a separate, private environment and maintains the most up-to-date server security.
Not only does commingling data violate the fiduciary responsibility that investment managers have with their clients, but it can also pose added security and data problems.
This goes hand-in-hand with the points about security and commingling data. Ensuring confidentiality, data integrity, and availability is a direct product of security and commingling data.
Of course, there is more good than bad in cloud solutions.
As far as the uglies go, if a cloud solution is based on any of the uglies above, skip it.
It goes without saying (but we’ll say it anyway) for anyone considering upgrading to a cloud-based solution, don’t upgrade without doing the proper due diligence. Make sure the requirements are understood, the risks assessed, the questions asked and the appropriate controls in place.