US financial firms embrace cloud, ‘fat fingers’ notwithstanding

NEW YORK: Only two years ago, an outage similar to the one that struck Amazon’s cloud services last month would have reinforced US financial firms’ view that shifting data and systems onto the public cloud was just too risky.

The fact that the February 28 shutdown had no visible impact on the industry’s use of cloud services goes to show how far it has progressed since then in embracing the cloud after nearly a decade of hesitation.

That change of heart came after providers Amazon Inc, Microsoft Corp and Alphabet Inc’s Google took steps to assure financial firms and regulators that the cloud not only made tech systems cheaper and faster, but also more reliable and secure than their own serverfilled warehouses.

The benefits are so unquestionable that last month’s outage caused by an employee who typed in a wrong code was barely a bump on the road to the cloud and merely a reminder that no technology is foolproof, financial executives, Silicon Valley vendors and analysts who work with them said. “You can’t just say if you use Amazon you get the magic cloud sauce and everything will work perfectly,” said Yevgeniy Brikman, the co-founder of Gruntwork, a startup that helps big companies deploy cloud services.

“And similarly that if you use your own data center that somehow magically everything will work perfectly. These are just tools.”

The payoffs of using the cloud are clear for an industry engaged in rounds of relentless cost- cutting.

Calculations performed for Reuters by research firm IDC Financial Insights show the biggest global banks saving US$ 15 billion by 2019 from cloud adoption, cutting technology infrastructure costs by 25 per cent.

About two thirds of global financial firms will be using cloud services in a significant way by next year, IDC predicts.

Developing an application on the cloud can help reduce the time it takes to launch from 89 days to 15 days, according to consultancy McKinsey & Company.