The growth of data, coupled with rising regulatory demands, brings challenges for financial institutions. They constantly struggle to manage and access information efficiently as regulations become complex. Moreover, as data volumes expand, the pressure to adopt advanced solutions becomes more intense.
Cloud solutions offer financial services valuable flexibility and scalability. However, clear governance, cost controls, and visibility into usage are needed to gain full benefit from the investment and keep it cost-effective. firms need clear governance, cost controls, and visibility into usage.Â
Conversely, waste is inevitable without clear visibility into the consumed resources. Eventually, what begins as a simple cloud migration can quickly become an ongoing struggle to control costs without missing out on performance, security, or compliance. The concern is daunting for industries like finance, where data confidentiality matters the most. At the same time, these organizations do not want to spend a fortune on cloud implementation.
How can the financial services industry (FSI) adopt cloud solutions and take control over their costs? Fortunately, there are ways to get the best of both worlds. In this article, we will review a few key cost optimization strategies for a successful cloud implementation.
Accelerate Efficiency with AI-Powered Workflows and Automation
The standardization of AI and automation is restructuring how things get done in both banking and non-banking financial institutions. If data silos seem to be a major bottleneck, AI-powered workflows and automation would be an ideal solution for the organization.
Financial organizations regularly generate loads of unstructured data through customer interactions and transactions across the touchpoints they operate. Expect that to happen every day as customers approach you for regular transactions.
Imagine how much data you can accumulate over weeks, months, and years. The thought of handling such volumes can be overwhelming if you do it manually, right?
With intelligent content workflows and automation, the resources needed to manage and process data can be cut down. This directly contributes to cost savings. Additionally, a centralized content cloud platform eliminates the need for multiple, siloed systems. This can reduce IT maintenance costs and the need for infrastructure investments over time.
Workflow automation also reduces dependence on manual labor. With this, institutions can cut down labor costs associated with mundane tasks such as data entry, document management, and processing. At the same time, errors are minimized, which spells lower costs of compliance and risk management.
Choosing a content management platform requires careful consideration. The following will help you pick the right one according to your needs:
- The platform should incorporate enterprise-grade security protocols and end-to-end encryption for secure financial services file sharing. This is essential to protect your sensitive data from breaches and other cyber threats
- AI-driven platforms help you stay compliant with strict industry regulations set by agencies like FINRA, OCC, and the SEC
- AI workflow solutions should easily connect with existing CRM systems, analytics tools, and customer-facing applications to eliminate data silos and streamline content workflows
Implement FinOps Practices for Governance and Accountability
Most financial institutions approach cloud spending reactively, addressing cost issues only after they’ve spiraled out of control. That’s the worst way to handle change, but being proactive from the start is the solution. Implementing FinOps practices creates a proactive governance framework that drives accountability across your organization. FinOps is not a new concept, but many institutions still struggle to fully embrace it.
FinOps brings financial accountability to the variable spend model of the cloud, where costs can fluctuate dramatically based on usage. As opposed to traditional capital expenditure models, cloud spending is dynamic. This makes it harder to predict and manage without a clear strategy and roadmap.
By following these FinOps best practices, you can create a shared responsibility for cost control involving financial teams and cloud engineers:
- Start by establishing clear cost allocation tags and implementing showback or chargeback models early as you move to the cloud. This connects cloud resources directly to business units or applications, making stakeholders accountable for their spending decisions.
- Create cross-functional FinOps teams that bring together finance, engineering, and business stakeholders. These teams should meet regularly to review spending patterns, identify optimization opportunities, and align cloud resource utilization with business priorities.
- Set spending thresholds with automated alerts that notify appropriate stakeholders when costs approach predefined limits. This prevents surprise overruns that impact your bottom line.
Rightsize Cloud Resources
Over-provisioning is an all-too-common issue in cloud environments, where organizations allocate more resources than they actually need, leading to unnecessary costs.
This overspending typically happens when financial institutions err on the side of caution. While this might seem like a safe approach on paper, your infrastructure doesn’t need to be sized for theoretical peak loads year-round.
Rightsizing involves matching instance types and sizes to your actual workload requirements. Start by analyzing historical utilization patterns across your applications. Look for instances constantly running below 40% CPU and memory utilization—these are usually the prime candidates for downsizing.
Financial applications tend to have predictable usage patterns tied to market hours, month-end processing, and quarterly reporting cycles. Take advantage of these insights by implementing scheduled scaling policies. For example, your market analytics platform might require substantial resources during trading hours but can operate on minimal infrastructure overnight.
Legacy lift-and-shift migrations can also result in significant over-provisioning. Review these workloads first, as they often represent the largest optimization opportunities. Consider refactoring critical applications to use cloud-native services that automatically scale with demand.
Level Up Your Cloud Strategy
Are you treating cloud costs with the same rigor as your investment decisions? Even organizations that handle complex financial operations can struggle on this front. However, there are ways to answer the questions and address the cost-related challenges of cloud implementation.
Financial institutions that apply portfolio management principles to their cloud resources often see enhanced efficiency and cost optimization. The roadmap is simple and easy to adopt, provided you take the right approach from the start. Start small, measure relentlessly, and optimize continuously. Your end goal should be creating a culture where efficient resource utilization becomes business as usual.
