Compliance struggles lead to cloud adoption for financial firms

Friday, April 29, 2011

With the ever-watchful eyes of federal and industry regulators casting their gaze on financial institutions, more firms are adopting cloud solutions to meet data security and regulatory compliance, a new study found.

According to the study, conducted by Forrester Consulting, the cost of compliance for financial services firms has become a burden. In a survey of 187 compliance and legal professionals from financial services firms, more than 60 percent of respondents indicated they believe cloud services would help reduce the total cost of ownership and improve the performance of the compliance solutions.

Additionally, half of the polled firms said they plan to deploy some sort of cloud-based compliance solution, such as message archiving, by next year.

"We evaluated a number of solutions and concluded that a hosted service would streamline compliance and reduce costs," said Scott Black, general counsel and chief compliance officer at Hudson Bay Capital Management.

Email practices, in particular, often raise compliance concerns for organizations across all industries. According to a separate study by VaporStream, nearly three out of four employees admit to violating regulatory compliance via email.