CAPCO INSTITUTE JOURNAL #55
CLOUD FINANCE :
A REVIEW AND SYNTHESIS OF CLOUD COMPUTING AND CLOUD SECURITY IN FINANCIAL SERVICES
MICHAEL B. IMERMAN | Associate Professor of Finance, Peter F. Drucker and Masatoshi Ito Graduate School of Management, Claremont Graduate University; Visiting Scholar, Federal Reserve Bank of San Francisco
RYAN PATEL | Senior Fellow, Peter F. Drucker and Masatoshi Ito Graduate School of Management, Claremont Graduate University
YOON-DO KIM | Quantitative Analyst, Federal Reserve Bank of Minneapolis; Ph.D. Student in Financial Engineering, Claremont Graduate University
Cloud computing is hardly a new concept, although its embracement by the financial services industry has mostly occurred in the past few years. Unlike traditional computing infrastructure used by financial services firms, such as data centers and mainframes, cloud computing relies on the internet to access storage hardware as well as software applications from anywhere at any time. This is proving to be of tremendous value for many firms especially as remote work becomes more common and on-the-fly data access is expected by stakeholders.
However, it is not without its risks and challenges. In this article, we review the current state of cloud computing as it applies to financial service firms and outline both the benefits and challenges, including cybersecurity issues for data and applications based in the cloud. Further complicating matters for incumbents in the financial services industry is the fact that fintech challengers are “cloud native”, in that they are built upon a cloud-based computing infrastructure and are, therefore, able to more easily adapt to changes with the technology.