The finance sector is still hesitant to adopt Cloud Computing because of the old bug bear of data security concerns as well a new innate conservatism when it comes to technology spend.
A survey conducted by security firm LogLogic found that 34% of finance firms believe that Cloud Computing will not become strategic to their IT functions going forward. More than 75% of the responding firms expressed concern regarding government regulations to support this view, while 58% said that their company only plans to invest in essential IT functions, like security and email compliance.
"While the Cloud holds many benefits for the enterprise, we're not surprised to see that financial services firms are hesitant to adopt Cloud Computing," said LogLogic CEO Guy Churchward. "There are still many lingering questions about data security and transparency in the Cloud, and it's up to Cloud providers to offer visibility into these practices before we see mainstream adoption from financial services firms."
“A significant pitfall to cloud computing is the lack of control. It creates a massive security risk,” argued one IT security manager interviewed, security requirements are “crucial” to adoption and use of Cloud Computing while another respondent from a Fortune 500 global financial security company noted that: “We don’t have any Cloud Computing implementations right now. Typically we’re early adopters – but with Cloud Computing, we won’t be.”
“While the financial services market has traditionally been a leader in adopting cutting edge information technology, the majority of financial services companies said that they are focused on maintaining essential IT functions in 2010 rather than investigating new technologies for future investment,” LogLogic suggests in its findings: “Coming out of the trough of 2009 when the industry was torn apart by the financial crisis and many IT professionals lost their jobs, the name of the game is keeping systems up and running and compliant with industry and government regulations. Few are exploring new technologies or seeking competitive market advantages through major investments in new IT projects. The traditional early adopters of IT technology made conservative plans for 2010.”
The study also found compliance to be a major inhibitor. The study noted: “Financial services remains one of the most strictly regulated industries worldwide and regulatory compliance continues to be a top priority for IT professionals. Of the companies surveyed, the majority of firms noted that their compliance efforts were focused primarily on Sarbanes-Oxley (SOX) and Payment Card Industry Data Security Standards (PCI-DSS), though most were also adhering to COBIT, ISO and ITIL. 59 percent of respondents noted that SOX and PCI-DSS were the most critical to their firm.”
Additionally, IT professionals at financial services organizations continue to worry about increasing regulations. More than 75 percent of IT professionals surveyed noted that they were either somewhat or moderately worried about new regulations being introduced to the industry.
LogLogic surveyed 82 financial services firms from around the world on their current IT strategies. Companies surveyed ranged from small and medium businesses with less than $250 million in annual revenue, to large enterprises with more than $1 billion in annual revenue.
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