Cloud migration for banks – Security, compliance and agility
October 24, 2025
Key takeaways
- Moving to the cloud enhances banks’ disaster recovery, ensures geographic redundancy and strengthens operations during outages or cyberattacks, safeguarding customer trust and minimizing disruptions.
- Cloud platforms allow faster product rollouts, easier geographic expansion and access to AI and analytics, helping banks stay competitive, scale efficiently and deliver personalized customer experiences.
- Successful migration requires aligning with business goals, reskilling teams and adopting modern approaches like APIs and microservices.
Given the high cost of operating a data center, it’s no wonder that cloud migration began to go mainstream in the mid-to-late 2000s. The physical infrastructure and maintenance of aging behemoths could no longer be justified, and it wasn’t just the exorbitant costs.
Without the ability to scale up or down, some banks were paying dearly for unused capacity while others missed out on revenue opportunities because of limited computing power and storage.
Despite the potential for greater cost control, you may be hesitant to leap into the cloud due to security and compliance concerns. After all, you bear a great responsibility for keeping your customers’ money safe, whether you’re talking about deposits at rest, funds moving through the payments system or assets that are hard at work in investment vehicles.
How cloud migration strengthens banks' security and resilience
Rest assured, security and compliance are serious business for the “big three” cloud providers, with Amazon Web Services, Microsoft Azure and Google Cloud Platform making massive investments in advanced security measures and compliance certifications. Their platforms satisfy the most stringent global financial regulations, so their ability to protect your bank surpasses what you can achieve on your own.
Still, the thought of data leakage can keep you up at night, and the prospect of allowing third-party access to your customers’ sensitive information is a tough sell. But whether you move to the cloud or not, you already have an array of best-practice tools at your disposal, such as multifactor authentication, the principle of least privilege, the implementation of data loss prevention software and the encryption of sensitive data. Likewise, your regular software updates, employee security training, vulnerability scans and incident response plans are essential.
Among other concerns that can disturb your sleep, disaster recovery ranks high. But cloud computing can ease your worries about a major operational disruption that could destabilize your organization, compromise customer trust, invite cyberattacks and bring about financial loss and reputational damage. A move to the cloud enhances your resilience, enabling you to distribute processes and data across multiple data centers for geographic redundancy and uninterrupted operation during an outage or cyberattack.
How cloud migration helps banks scale and expand faster
But the cloud is not all about warding off disaster. Again, looking back at the mid-2000s, banks began embracing the cloud for reasons beyond costs, security and compliance.
At the time, if you were among the banks weighed down with rigid legacy systems, you may remember that sinking feeling as tech-savvy startups passed you by with innovations built on cloud platforms. Your migration to the cloud repositions you in the competitive arena, allowing you to roll out new digital products in days, not months.
Your transition to the cloud also sets you up for easier geographic expansion, without the need to build capital-intense physical infrastructure or a brick-and-mortar presence. And because you operate on a pay-as-you-go model, your resources can be scaled to meet demand in new markets.
Cloud platforms also offer access to the latest in artificial intelligence, machine learning and advanced analytics, all of which boost your ability to make the most of market data, extend personalized offerings, provide the convenience of embedded finance and sharpen your decision-making capabilities.
Why a successful cloud migration requires transformation, not just a lift and shift
Eager to reap the benefits of cloud computing, many early adopters tried to simply lift their existing software and shift it to the cloud, with disappointing results.
What they learned was that migration without first rightsizing brought little value and, ironically, even higher costs than before. With their on-premises model set for peak capacity, all they really did was begin paying high premiums for someone else’s data center without receiving the elasticity, resilience or efficiency that would offset the added expense.
The more successful banks recognized that a cloud migration is not just another IT project: It’s a business transformation. They further realized that the cloud is not a panacea that can magically fix broken processes. And they understood that success must be measured not only in the relocation of applications, but also in hard metrics such as time to market, increased revenue and customer satisfaction.
How banks can build a business case for cloud transformation
According to The Harmony Gap research, a survey conducted by FIS® and Oxford Economics, 42% of financial institution respondents have adopted cloud computing, with another 78% planning to invest in the next two years. The numbers grow larger when you look at banks, with half (49%) having already invested and 80% planning to do so within the next two years.*
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% Presumably, these banks faced the same tight budgets and limited resources that may be holding you back, yet they were successful in gaining buy-in at the top levels of management. The best path forward is to start engaging key stakeholders, building a coalition of support and aligning your proposed migration with your bank’s broader business objectives. Your proposal should present a clear governance framework to ease concerns about the process, ensuring that risks are mitigated and resources are effectively allocated throughout the transition.
While top management support is essential, so is commitment from your workforce whose day-to-day activities and job descriptions are sure to morph throughout the journey. You need to develop a strategy to reskill your teams and foster a continuous learning culture that encourages career growth.
Best practices for managing a secure, efficient cloud migration
Not everything can be accomplished at once, so it is essential to have a detailed roadmap that can be executed in stages, prioritizing the products most likely to drive revenue, customer satisfaction and competitive advantage.
The modern, recommended approach is to wrap your legacy core systems with secure API gateways, which keep ongoing innovation on the front end separate from the legacy’s back-end complexity, thus minimizing disruption. Complementary methodologies include the use of microservices and containerization, an approach that divides tasks into small, independent services and packages them into portable containers that run consistently across infrastructures.
Many banks, however, lack direct cloud experience, turning instead to managed cloud services from a trusted fintech partner. Typically, you and your provider work through a deep-dive analysis to arrive at a customized design, followed by provisioning of the infrastructure, network, monitoring and security. With a focus on cost optimization, the partner manages the migration, then provides 24/7 monitoring to maintain security and stability.
With rising costs, intensified competition and the increased frequency and sophistication of cyberattacks, more banks are accelerating their plans to migrate to the cloud. By joining their ranks, you’ll achieve far more than cost efficiencies, heightened security and tighter compliance. Your newly modernized bank will be better positioned to meet competitive pressures head-on, exceed customer expectations and grow.
*FIS, The Harmony Gap: Finding the Financial Upside in Uncertainty (with Oxford Economics), May 2025
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