November 04, 2013

Managing Documents In The Cloud

Last month Barclays made headlines with a new service called Cloud It, a cloud-based document management system where customers can store their personal documents in Barclays’ private cloud. While some in the industry question the value of such a service, it’s an indication of a greater trend in that banks are learning to trust the cloud and feel more secure using it for a core application such as document management.

Bill Pappas, CIO for Global Wholesale Banking Technology & Operations, Bank of America
Bill Pappas, CIO for Global Wholesale Banking Technology & Operations, Bank of America
The cloud offers clear benefits for document management, such as faster system deployment, lower cost of ownership and the ability to cheaply leverage specialized talent with a provider, says David Jones, the cloud solution marketing manager for Hyland Software, an enterprise content management provider that offers a hosted cloud product.

The biggest challenge to cloud adoption in document management used to be security and the threat of a data breach, Jones says. But those concerns are receding. “Everyone talks about security and cloud vendors worry about it every day. Their business depends on it. We’re starting to see cloud vendors put very hard security in place,” Jones says.

As more firms begin to experiment with the cloud, many are using document management as an early trial, making it one of the fastest-growing use cases for the cloud. A survey last year by AIIM found 46% of those in IT expect the cloud to be the de facto deployment for document management in the next three years — higher than the 41% that expected the same to be true for general software applications.

Barclays’ Cloud It demonstrates the growing comfort that banks have with document management applications in the cloud. At a time when banks are trying to rebuild trust with their customers, Barclays is willing to stake its reputation and its customers’ personal documents on the cloud.

Whether the service pays any dividends for the bank is yet to be seen, and some are skeptical that it will pay any. “We’re starting to see more banks leveraging the cloud to open statements and documents for customers,” Jones observes. “But I don’t really see the benefit for a bank in a full-fledged two-way content management system in the cloud unless they’re charging it.”

Barclays is offering Cloud It free to consumer and small-business customers, and sees it as a customer experience enhancement. The service’s aim is to help build an experience that makes customers’ lives easier, a spokesperson said via email.

Even those who are skeptical about Cloud It see other new opportunities for banks in document management in the cloud. For instance, banks increasingly are deploying cloud-based document management combined with e-signatures for mobile workers to get documents signed by customers.

One of Hyland’s customers, wealth management firm Hilliard Lyons, is looking into deploying just such a system for its off-base advisers, says Mitzie O’Rourke, a developer at Hilliard who works on the firm’s content management.

Although O’Rourke says she isn’t concerned about the security of the firm’s documents in the cloud, there still are challenges with any outsourced document management system that requires constant communication with the provider. “My concerns are around if they make a change to the servers without my knowledge. I have to be on the lookout for any changes,” she explains. “It’s simply an issue of communication.” – Jonathan Camhi

Platform-As-A-Service Poised For Growth

Platform-as-a-service may not be getting all the hype other cloud services do, but the PaaS market is growing slowly and is poised to see an increase in adoption, experts say. Whether that trend also occurs within the financial services industry remains to be seen.

Exact definitions of what constitutes PaaS vary slightly from source to source; online IT dictionary Techopedia perhaps sums it up best, describing PaaS as “a computing platform that is rented or delivered as an integrated solution, solution stack or service through an Internet connection.”

Gartner estimated earlier this year that worldwide PaaS revenue reached $1.2 billion in 2012, up just a bit from $900 million in 2011, a small share of the overall cloud services market. But banking, by and large, is not among those industries dipping its proverbial toe in the emerging PaaS market.

“It’s still something the technology vendors are talking about more than the banks really scrambling for it,” says Nancy Atkinson, senior analyst at research firm Aite Group. She adds that lingering concerns about data security in the cloud also hamper PaaS adoption among banks.

“They’re wondering how segregated the data is, and is their data completely walled off from someone else’s?” Atkinson says. However, she believes there might be some initial use of PaaS among banks as a way to sample new systems as they come out without fully committing to them. “Kind of like a ‘pay by the drink’ mentality, rather than having to pay for a whole platform,” as Atkinson describes it.

Atkinson believes that PaaS will be more highly adopted by bigger banks, either as customers or even as creators of their own PaaS systems that they can sell to smaller institutions.

One Bank A Step Ahead

One large bank already experimenting in the PaaS space is Charlotte, N.C.-based Bank of America. Bill Pappas, Bank of America Merrill Lynch‘s CIO for global wholesale banking technology and operations, says the bank has prioritized internal cloud hosting, designing a set of offerings around network storage and compute storage that it can manage on behalf of clients. While Pappas describes this more as infrastructure-as-a-service, it’s the framework that will allow the bank to pursue PaaS more fully, he adds.

Pappas notes that the cloud project is part of Bank of America’s overall strategy to modernize its infrastructure.

“Cloud does not exist in isolation. It needs to align with the business strategy,” he adds. “At Bank of America, we have prioritized the internal cloud, while demanding that issues of privacy, security, access of data, and data movement be resolved before going public.”

Overall, Atkinson believes that it although will “take awhile” for banks to fully embrace PaaS, it will ultimately be worth it.

“The benefit [for banks adopting PaaS] is they can bring new products and services to market quicker and there’s no restrictions of capacity, but it still can be very difficult for banks to make that leap,” she says. – B.Y.