One of the recurring challenges for CFOs and CIOs is how to get to get more efficiency from their teams and infrastructure and deliver ongoing cost improvements. A great example of this is how to be smarter with the peaks and troughs of computing activity. For example, for commercial and investment banking operations, the need for real computing power may only take place during the working day. So, you need high powered machines and servers from 9-5, but you have little use for them overnight.

Similarly, asset and fund pricing calculations are run at the end of the day, so those firms need computing power after hours. In insurance risk, there are reporting requirements on a monthly, quarterly, semi-annual and annual basis.

For example, one of our insurance risk clients normally runs around 200 computing cores. But as reporting deadlines approach, they need to gear up. At those times of the year, they can quickly access 14,000 cores (or more!), and they can scale back down just as easily. How? Through the cloud.

As cloud technology matures, technology leaders and CFOs no longer face the dilemma of whether they must struggle to rev up for those high demand periods or purchase expensive hardware just to watch them lie fallow the rest of the time.

With the cloud, you can “rent” resources during for only the time you use them. This avoids hardware depreciation and gives you up-to-date and powerful technology that is automatically upgraded and easy to scale up or down to meet your needs.

In addition, rapid disaster recovery comes as standard, and keeping your data systems in the cloud eliminates capital expenditure on infrastructure, so you never pay for more than you use – which substantially reduces your costs. If the cloud is coupled with highly secure IT environments, you can effectively outsource the functions usually performed by internal IT, freeing up internal resources and budget.

The focus of the companies like FIS on robust physical and logical controls has helped overcome historical concerns about security in the cloud. Testament to firms’ change of heart has been their significant adoption of the public cloud. And their confidence has been well-rewarded, as costs are continuing to drop. This is thanks to both increased usage and massive investment by not only cloud providers but also companies like FIS, who provide a “one-stop shop” for managing the applications and infrastructure 24/7. Globally, regulators are also starting to embrace the cloud. For example, from the start of this year the Financial Services Commission (FSC) in Korea gave the green light for financial services companies to start using the cloud

With ever-increasing regulation and reporting requirements already costing firms dearly, the reduced cost of the public cloud is great news. But the advantages of a cloud-based operating model go beyond offsetting the costs of compliance – especially when it comes to tackling challenges like the Long Duration Targeted Improvements for US GAAP (LDTI) and IFRS 17 accounting standards for insurers.

IFRS 17’s impact is particularly strong here, as it forces interactions between finance and actuarial systems. This in turn necessitates the exchange of more data between the two domains, while placing additional time constraints on the actuarial risk process. And that’s where a managed cloud environment for your applications really comes into its own. Not only can you rapidly scale hardware up and down to your changing requirements, you can free up in-house IT resources to add value in other areas and transfer any technology risks to your managed cloud service provider, with its combined knowledge of both the software application and the cloud.

As well as lending itself to the usage patterns of risk reporting, a managed cloud service can help address a fundamental issue for most IFRS 17 implementations – how to connect and synchronize the two worlds of actuarial and finance to ensure consistent, highly granular, mutually comprehensible data and align business processes.

And by keeping all of the data management, calculations and processes associated with IFRS 17 or LDTI in the same secure, cost-effective public cloud, you can maintain a clear audit trail and minimize costly and time-consuming data transfer between environments.

Bigger picture, beyond all of the immediate benefits of the cloud, you also have unprecedented flexibility and scalability, putting your whole business in a much stronger position to manage any future challenges. Then those harried C-level executives can confidently move onto the next item on their list.

Jumpstart your day in a matter of seconds with quick snapshots of industry trends and leading perspectives delivered straight to you.