Key Steps To Select Cloud Lending Solution – and Some Myths To Bust Along The Way
let’s bust some myths. As with any technology not previously used by financial institutions, the misconceptions about cloud lending solution are legion. Here are five Myths of the Cloud –
“cloud is not secure than an On-Premise solution”
Although nothing is impossible, one of the benefits of using a cloud-based Lending solution is that the vendor handles security tasks – patching – as well as security monitoring. Cloud service providers use firewalls between internal and external networks and encryption for valuable data further improves security. Given the wide usage of cloud, Security is set even higher than a Financial institution’s current standards.
“Our regulator would never let us adopt cloud”
Once the cloud became highly available, regulators actually championed its use for compliance tools like sanction screening, Auditing etc because it can enable Financial service companies to improve their capabilities consistently and transparently. The regulatory compliance filing with general bodies and government have become very easier and transparent. Now, Government bodies have become increasingly receptive to cloud deployments.
“No one else is using the cloud, and we don’t want to be the first”
The reality is that Companies have been using the cloud for a long time — they just haven’t been using it for Lending, yet. Organizations already using the cloud include services like Salesforce, payment solutions like Google pay and Cointribe, and probably your card processor.
“You have to move all to the cloud”
Cloud provides higher flexibility to store data of what you want and when you want. Much Non-Banking Financial company’s (NBFC’s) adopt a hybrid solution with core elements of the lending infrastructure in the cloud and other elements remaining on-premise. Examples include using a hosted online lending solution at the front end, with the Account & sanctions engines on-premise.
“Using the cloud won’t save us money in the long ”
With this myth, reality depends on two factors.
First, where you are on the cloud tech adoption curve. Operating a solution in the cloud may cost 20% more on a cash-on-cash basis, but once you consider the costs of upgrades. Testing cycles & maintenance, the cost of the cloud-based solution is usually lower.
Second, the pricing model. Some Solutions are cheaper to install on-premise above a certain volume. But with the cloud the opposite is true since one-time investment has been made in the platform, the total cost of ownership for both short and long time will be cheaper with the cloud as it works on “PAY AS YOU GO” pricing model.
Key steps in selecting a lending technology
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