Romir Bosu likens the advent of cloud computing to changes made decades ago in how factories got their power. In the past, manufacturers needed their own power plants to generate electricity. Each factory had its own power generator.
“As power-generation evolved, utility companies built power grids and ran power lines to factories,” says Bosu, founder/CEO of Compushare, a CUNA Strategic Services alliance provider. “Factories and consumers now pay for what they use, and it’s much more reliable than generating their own electricity.”
Likewise, he says, “the cloud turns computing into a utility.”
The term “cloud computing” has become increasingly pervasive in the financial services industry and elsewhere. Perhaps equally ubiquitous is the confusion surrounding what cloud computing is and what it means to credit unions.
The Federal Financial Institutions Examination Council (FFIEC) defines cloud computing as “a migration from owned resources to shared resources in which client users receive information technology [IT] services on demand from third-party service providers via the Internet ‘cloud.’ ”
Cloud computing is somewhat similar to using a service bureau for core processing, Bosu adds. “The difference is that a service bureau hosts and runs one single application, typically its own.”
As a cloud provider, however, Compushare offers some 200 applications on its platform—and the number keeps growing.
“Anything a credit union uses internally, we can host and have running with built-in security and business continuity,” Bosu says. “And when an application needs to be updated, we handle that.”
Small CUs jump in
Cloud computing offers the advantages of more effi- cient, cost-effective operations with redundant systems and no need for heft y hardware investments, says Michelle Shapiro, financial services industry manager for Hyland Soft ware. The company offers OnBase Online, an enterprise content management (ECM) solution in the cloud.
Yet she says credit union clients have been slow to migrate to the cloud.
“There’s still a bit of a fear on the credit union side about giving up that member data,” Shapiro says. “But the cloud is secure. We’ve had a proven solution in that space for 13 years. A lot of community banks have used it for years.”
Small credit unions are moving to the cloud more rapidly than larger ones, says Kirk Drake, president/ CEO of Ongoing Operations, a credit union service organization (CUSO) that offers business continuity and cloud computing services.
“Credit unions with less than $100 million in assets are jumping in and moving everything to the cloud,” he says. “They’re getting out of IT altogether.”SIDEBAR:
Take, for example, $70 million asset Department of Labor Credit Union in Washington, D.C. When it completes its move to the cloud later this year, “We will no longer have any servers in the credit union,” says Joan Moran, president/CEO.
Moran, who has no IT staff, began researching the cloud about two years ago when her technology vendor told her the credit union’s servers needed to be replaced. “I wanted to learn about our other options,” she says.
Seeking a better understanding of what the cloud could offer, Moran turned to Impel Consulting Group, which is part of MY CU Services, a CUSO formed by Mid-Atlantic Corporate Federal Credit Union.
From there, the decision to move to the cloud “was pretty much a no-brainer,” Moran says. And since her board members are all employees of the federal government, which uses the cloud in a big way, she had no problems selling the idea to them.
With the cloud, the credit union’s 14 staffmembers no longer will have to worry about a server going down, determine what needs to be backed up, or decide when to replace some system.
“We’ll free up our time,” Moran says, “to do what we’re supposed to do—take care of our members.”
NEXT: Moving by components