Bending toward the cloud
Credit unions need to become familiar with cloud-based applications, agree IT professionals, because some software vendors are upgrading existing software only for use in the cloud.
Most software companies are bending their development efforts toward the cloud, says Miller, both because clients appreciate the ease of accessing software via an Internet browser and because it makes it easier for the software company to license and deploy its products.
“It’s a fact that many manufacturers are going to develop products that will never provide for in-house solutions again,” Miller predicts. “They’ll provide their software exclusively via a browser.”
NetSol Technologies, which offers software to manage back-office processes for leases and loans, has started offering loan management software from the cloud. The company recently announced that its LeasePak software is available as an SaaS solution.
“We realized financial institutions are beginning to accept the notion of cloud computing for mission-critical applications,” says Andrew Lea, manager of marketing and corporate
Planning for migration to the cloud also allows credit unions to take advantage of faster time-to-market, more efficient use of resources, and the ability to integrate multiple service offerings, adds Mendenhall. While the development of cloud services is still in its infancy, he says, “those that leverage cloud-based services will be able to differentiate their position in the marketplace.”
For small credit unions that struggle to find resources and personnel to keep up with security demands, security experts say cloud-based solutions provide enhanced security because cloud vendors use state-of-the-art security precautions.
Four out of five credit unions are better off with cloud computing than managing complex applications in-house, says Jim Stickley, chief technology officer for TraceSecurity, a CUNA Strategic Services alliance provider. These smaller credit unions lack the policies, procedures, and people required to keep systems and data secure, he says.
Vendor due diligence is crucial, Stickley adds, especially when dealing with companies that are newcomers to serving credit unions.
Alliant’s Pereira suggests credit unions begin exploring cloud-based solutions by identifying business objectives and potential risks to help determine what types of data they can entrust to the cloud and what cloud-based services can deliver the biggest benefit.
Alliant has in-house core processing, but uses the cloud to provide personal financial management online. Solutions for e-mail and human resources are other applications credit unions should strongly consider moving to the cloud, says Pereira.
“The cloud allows companies to essentially reach into scalable resources to boost capacity or add capabilities without having to invest in new infrastructure and manpower,” he says. “It’s not about controlling the computer room; it’s about providing secure, reliable, efficient, and timely services to the members and the business.”
Cloud Processing Pros and Cons