Moving to the Cloud Doesn't Have to Be Daunting for Small and Mid-size Financial Institutions

Moving to the Cloud Doesn't Have to Be Daunting for Small and Mid-size Financial Institutions

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Cloud computing has disrupted just about every single industry since its inception in the mid-2000s, and financial services are no exception. According to a 2020 Accenture report, banking is just behind industries like ecommerce/retail, high tech electronics, and pharma/life sciences on the cloud adoption maturity curve.  

In fact, the average bank has 58 percent of its workloads in the cloud, but the majority run on private rather than public cloud which limits the cost-savings and benefits. The emphasis on private cloud may be due to the unique challenges the banking industry faces, including meeting stringent regulatory requirements on infrastructure they don’t own. And for banks that have made no move to the cloud, investments in legacy systems and the difficulty transitioning to the cloud may be an additional roadblock.  

For smaller and midsize banks in the sub $10B asset class, the decision to move the cloud can be even trickier. They may feel pressure from their boards to adopt this powerful new technology while also being strongly reminded to do so safely! Regional banks often build their reputations on the trust of local communities which makes any change that could damage that an enormous risk. At the same time, they may be competing with larger players that have adopted the cloud at a rapid pace to provide cutting-edge services to consumers. Capital One became the first major bank to go cloud-only when it closed its own datacenters entirely and moved all operations to AWS public cloud. Accenture found that moving swiftly to the cloud is paying off for banking “cloud leaders”—they’re growing revenue twice as fast as the “laggards”.  

So, it’s clear that the move to the cloud is coming for even smaller banks, but where to start? We suggest taking a look at your enterprise data warehouse.  

Take the first step into the cloud with your enterprise data warehouse

For banks that need to minimize risk, are unsure how to make the move safely and properly, may not have a CISO or even dedicated security team, and whose IT teams that are focused on managing their own iron in their own datacenters, taking the first step to the cloud can seem like a heavy lift. It doesn’t have to be.  

You can start small with your enterprise data warehouse. This is often a SQL server in your own datacenter where you collect a daily or weekly data dump from your core systems. It may contain some sensitive data that’s accessed by various groups around the company via business intelligence tools like PowerBI, Qlik or Tableau installed on user desktops. Marketing for example, might run zip code reports on deposits in order to make targeted offers on mortgages or car loans.  

The key is that the data is already consolidated and it’s not core software – that reduces both the complexity and the risk. Moving this workload to Snowflake with ALTR data governance and security is fairly straightforward and provides several interesting advantages for small and mid-size financial institutions:  

  • Reduced costs: Eliminate the expense of maintaining the datacenter server infrastructure required for an on-prem data warehouse. With Snowflake, you pay for storage separately from compute, minimizing costs.  
  • Increased reliability and scalability with enterprise-level security: Snowflake’s unique architecture allows virtually all your users and data workloads to access a single copy of your data without impacting performance. In addition, Snowflake and ALTR offer SOC 2 Type 2, PCI DSS compliance, and support for HIPAA compliance.  
  • Expanded BI access: You can standardize on a SaaS business intelligence tool you don’t have to install or maintain. This allows you to provide easy access to more users across company to make best use of your data.  
  • Enriched data with third party datasets: Snowflake Data Marketplace supplies more than 500 live and ready-to-query data sets from more than 140 third-party data and data service providers to enhance your own datasets and provide deeper, actionable insights for your organization.  
  • Integrated cloud-native data governance and security: With ALTR, you can discover and classify sensitive data as it’s moved to the cloud then instantly and automatically restrict access based on those classifications. You also get complete observability and protection over how data is consumed regardless of access point.  

Snowflake + ALTR = your secure cloud data warehouse-in-a-box

Migrating your enterprise data warehouse workload to Snowflake with ALTR essentially gives you a “secure cloud data warehouse-in-a-box”. You can take on this discreet pilot project, with minimal investment of time, resources, cost and risk, and learn how the cloud works best for your financial institution. This allows you to start operationalizing your process for moving additional workloads to the cloud safely.

In addition to the experience gained, there can be measurable results. Accenture estimates that when financial institutions move data warehousing and reporting workloads to the cloud they could see a 20-60% reduction in costs, increased operational efficiencies, improved real-time data availability, and better data governance and lineage.  

Not bad for your first adventure into the cloud.

Ready to start your secure cloud data warehouse journey? Let us show you how easy it is to get started. Get a demo today.

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