Mostly sunny with a chance of rain : migrating to the cloud

There is no doubt that the cloud is opening up a new world for businesses, but what are the risks?

As with anything new, migrating to the cloud can be frightening, particularly if you haven’t had the time to become familiar with it and to understand its potential opportunities and threats. The cloud’s very name suggests something intangible and elusive.

Here to stay

However, the cloud is here to stay, and more and more businesses are making use of cloud based services to, among other things, store data and share information between their staff and other networks of users. It is also used to access cloud-based software and processing capacity instead of owning it themselves.

Think of the cloud as a utility, facilitated by the internet, in the same way that electricity became a utility in the 20th century.

Before this time, factories had to generate their own electricity as there wasn’t a grid to draw from. The cloud has created a computing grid that users can tap into for as much, or as little, storage and processing capacity as they require.

Risks

The cloud presents certain risks, such as the risk of your data being compromised or stolen through a cyber attack. However, many of the same risks exist if you have your data stored locally on your own client server.

There are also legal risks, such as the risk of falling foul of the Protection of Personal Information Act (POPI). There is still uncertainty about when POPI will actually become effective but once it does, companies will have 12 months to comply with its provisions.

The current consensus is that the effective date will only be declared by the President once the Information Regulator has been established.

Risk of any kind can be difficult to eradicate completely, which is why in insurance we talk about mitigating or managing risks. The same applies to your home and other physical assets. While you can add layers of security to reduce the risk of a break-in, you can’t eliminate the risk altogether.

Just as a home insurance policy might require you to have an alarm system, so cyber insurance has its own set of conditions that have to be fulfilled for a claim to be valid. Cyber crime is carried out by much more sophisticated criminals than the average robber. As a result, cyber insurance is very sophisticated, so it’s important to use a specialist.

Opportunities

Whether your business is large or small, the cloud appears to offer real opportunities to streamline and simplify your business, save costs and increase your functionality.
It can enhance front-end sales, distribution and customer service while improving back-end operational efficiency and expense management.

It allows you to engage and track your clients, deliver advice and provide fulfilment of that advice not only from the office, but from anywhere and on a variety of different devices from laptops, to tablets to mobile phones.

All this, of course, has significant advantages for your clients, who increasingly want a personalised experience, irrespective of their value to your company. They want you to really know them, and to understand their needs and preferences quickly and easily.

The cloud makes all of this – and more – possible. It can provide the kind of scalability and power you need quickly to provide this kind of experience.

However, only an organisation with a large amount of data will benefit from this as advisers with a small data footprint can achieve the same thing with their own internal infrastructure.

Another option for advisers and brokers to explore is to take advantage of an adviser network that offers in-house customer relationship management (CRM) systems while simultaneously managing security and software updates.