6 Benefits and Concerns for Cloud-Based Financial Solutions

David Campbell
By Technology

Editor’s Note: To assist our clients in understanding the issues connected with cloud computing, we will post a series of short write-ups on our blog about this subject.  The following is the first of these posts and gives an overview from a technical perspective.  In later posts, we will look at other issues from various points of view that we believe our clients should consider when making decisions about cloud computing.  Come back to our blog to read more about this continuing discussion. See the second post in the series: Cloud Computing: The Great Debate and our third post: Heartbleed: Fresh Evidence for the Cloud Debate.

 

Cloud-Based Benefits

cloud-computing-financial-solutions

Perhaps the biggest issue in the computing world right now involves remote servers that are used under contract by outside companies and accessed via the internet.   This is commonly called “cloud computing.”

There is no doubt that “the cloud” can significantly impact how an organization conducts its business.  As the cloud becomes more main stream within accounting environments, we see many companies moving from the ‘why/when’ of cloud adoption to focus on the ‘how’.  The reasons for this migration are not hard to understand.  There are major benefits to be achieved by utilizing the cloud, including:

1. Reduced costs

  • Capital and operating expenditures – For many firms it makes economic sense to eliminate in-house servers and the staffing that maintained them.
  • Backup and disaster recovery – Most of this is automatically supplied by the cloud provider.

2. Flexibility

In the anytime/anywhere access environment, you can quickly expand IT capabilities and respond to client needs much faster.

3. Limited downtime

Cloud providers guarantee up-time and redundancy. They can recover almost instantly from any system issues.

 

Despite the above advantages, most organizations remain very concerned about security and compliance issues surrounding their use of the cloud. Fortunately, we have found that leading service providers have a very firm grasp on security.

finnav-using-awsAt Financial Navigator, we use Amazon Web Services (AWS) as our cloud host. AWS has robust security solutions in place that meet the following IT security standards:

  • SOC/SSAE – 16/ISAE 3402
  • SOC 2
  • SOC 3
  • FISMA/DIACAP/FedRAMP
  • PCI DSS Level 1
  • ISO 27001
  • ITAR
  • FIPS 140-2
  • Cloud Security Alliance (CSA)

It would be very difficult or even impossible for any an internal data center to provide this level of security.

Cloud-Based Concerns

Other concerns connected with a move to the cloud include:

4. Availability

Internet connectivity is obviously crucial when you move to the cloud model. However, with the ease and prevalence of internet access, this has become less of an issue over time.

5. Data protection

Many organizations are concerned that once they move their data to a cloud environment, they will no longer have control over it.

6. Potential legal and regulatory challenges, along with liability concerns

e-Discovery is a huge worry, with the law still evolving in this area.

 

In light of these unresolved concerns, some organizations are exploring a “private cloud” solution which would include internal data center/servers behind company firewalls. This hybrid approach allows them to realize many of the cloud’s benefits without being exposed to some of the cloud’s uncertainties.

Clearly, the cloud offers exciting possibilities to business users. For some of our clients, the flexibility and cost savings outweigh other considerations. However, many clients are uncomfortable with the idea of their data being anywhere other than in their own data center. At Financial Navigator we recognize the validity of both points of view. Therefore, our family office software and financial accounting solutions will continue to address both cloud-based and internal-based models.