Small Savings and Credit Co-operative Societies (SACCOs) can now eliminate the cost of buying computer servers and employing ICT personnel by tapping into cloud-based servers. It costs SACCO’s between Sh 800,000 and Sh 2 million to acquire computer servers. This has made it difficult for small SACCO’s to leverage on technology to cut costs and improve efficiency.
In the past, traditional financial institutions such as banks were reluctant to embrace such technologies, especially on security grounds. But recent times have seen them taking a closer look as they start to fully understand the benefits it can bring.
Traditional banks have embraced the cloud solutions, thus SACCOs should follow suit. But, wait a minute; what is this thing called Cloud Computing? Cloud computing, in short, “Cloud storage”, is a new technology for storing the data over the internet. It’s a hybrid technology of computing various services like servers, software, networking, storage, databases, analytics and many more over the internet. Simply put, cloud computing is the delivery of computing services—servers, storage, databases, networking, software, analytics and more – over the Internet (“the cloud”).
Companies offering these computing services are called cloud providers and typically charge for cloud computing services based on usage, similar to how you are billed for water or electricity at home. Cloud services are delivered on demand via the internet with pay-as-you-go pricing. Cloud computing involves using multiple server computers via a digital network to store data and affords clients secure access to a variety of applications and data from any network device. It also provides an easy-to-use, cost efficient, flexible, dynamic and secure environment for modern business transactions. By providing near-unlimited hardware and software resources on a pay-as-you-go basis over the internet, cloud computing drives down costs and creates flexibility to respond to change.
So, how can Saccos benefit from cloud computing? Big benefits of the cloud include:
Cloud computing means SACCOs will not have to invest heavily in dedicated hardware, software and related manpower. It is much easier for them to update their IT infrastructure and the cloud’s modular, pay-on-demand model means they pay only for the hardware and software they need.
SACCOs will enjoy improved efficiency ratios and operating leverage. The standardisation inherent in the cloud could make it easier to integrate new technologies and applications in the future. Because technology and business operations can be much more closely aligned, the cloud gives SACCOs a golden opportunity to drive out complexity.
Serve clients faster
Cloud computing makes new and bundled products and services easier to develop and launch, either on a stand-alone basis or in partnership. It eliminates procurement delays for hardware and software. SACCOs will be able to boost computing power to meet demand peaks and provide the latest treasury solutions without needing to worry about whether the technology is up to date. Clients will be able to access SACCO systems using web browsers from anywhere at anytime.
Protection from cyber security risks
Cloud computing builds technical controls to protect access to SACCO members’ personal data and funds. The technical controls are monitored and any fraudulent access is alerted on and actioned to prevent loss. Speed and accuracy have become key tenets in the new war against cyber criminals, necessitating a radical shift from the traditional approach to cyber security management for SACCOs. With Kenya’s SACCO members estimated at 10 million with a collective deposit base of Kshs 150 billion, the need for a structured cyber security management program for these financial services organizations has become even more urgent as fraudsters change tact and adopt more sophisticated, slow and silent data breaches.
Cloud computing can help Saccos mitigate possible losses from internal and external fraudsters, provides a technical solution in identifying and qualifying cyber security risks faced by the organization. Cloud builds technical controls to protect access to Sacco members’ personal data and funds. The technical controls are monitored and any fraudulent access is alerted on and actioned to prevent loss. In addition to playing the deposit-taking and lending functions, many Saccos are expanding their range of member services, necessitating investment in technology infrastructure that can facilitate the transactions and link to other devices such as mobile phones.
Cloud computing, presents a low cost solution to the SACCOs, that can now easily access cyber security as a service and have all their data managed from a remotely from a secure cloud storage. With cyber security risk taking center stage in Sacco boardroom discussions, cloud computing will also deliver a new perspective to the valuation of risks associated with cyber security for the member-based financial services organizations.
Though many Saccos are fairly slow in embracing the use of technology to run their operations, those offering FOSA services are increasingly becoming targets for external cyber security breaches. Most fraud cases most of the times are internally originated, but the rise in external attacks raises the risk of higher losses. Saccos should now shift from low prioritization of cyber security risk, under investing in technology infrastructure and address what is turning out to be a biting shortage of skilled staff. Kenya’s savings and credit cooperative societies (SACCOs) are becoming targets for external cyber-attacks, thus a need for them to establish robust information technology infrastructure to flag such breaches and save their members from losing data and money. Some organisations offering cloud services for Saccos include Liquid Telecom and KUSSCO.