The term cloud, generally used to describe any variety of web-based technology that is hosted by a third party, has been a steadily growing topic of conversation within the financial industry over the past several years. Cloud adoption rates have grown across most industries but have been especially significant within treasury and risk management. A recent FIS market study, Corporate Treasury – Rising to the Cloud, indicated that 81 percent of treasurers have already migrated, or are likely to migrate their treasury technology to the cloud.
Why the exodus from installed, or on-premises deployments, to cloud deployments, and what are the practical benefits of a cloud deployment to an organization? Treasury practitioners commonly cite three practical benefits of the cloud, when compared with other deployment options:
- Cost: Treasury management solution projects often are dependent on a strong business case, which cloud deployments help make. The combination of subscription-based pricing and avoidance of upgrade costs, due to automated upgrade process within cloud deployments, significantly reduces both one-time and ongoing costs for clients.
- Standardization: Cloud solutions are designed for standardization, not customization. Greater standardization within the system configuration generally leads to a more manageable and achievable initial phase of the implementation, giving treasurers a higher likelihood of a successful project.
- Maintenance: In non-cloud deployments, the upgrade process requires involvement from the end user to install the new version and test it. This process can be disruptive for the treasury department, depending on the type of system, scope of the upgrade and more. With a true cloud-based system, upgrades are pushed to the end user, requiring minimal effort on their part.
There are other important drivers to the cloud, such as improved security and scalability, which have also helped drive treasury and risk technology to the cloud. Overall, treasurers utilizing cloud deployments have a distinct advantage of delivering greater strategic value to the organization by being able to focus on managing treasury instead of worrying about how the technology is supporting their operations.