“Lehman’s” Terms: What is the Cloud?

“Lehman’s” Terms: What is the Cloud? - Trellance Blog Post

“Lehman’s” Terms is an ongoing blog series reviewing the basics of data management and technology systems to provide an introduction or definition to those who may be new to some of the concepts covered. Written by Bill Lehman, this series will cover topics such as the cloud, machine learning, metadata, and more.

The cloud was first marketed to the public in 2011 by Microsoft, but it had been in use long before that. Cloud computing first began – in a very rudimentary manner – in the 1960’s, when DARPA sought a way to allow 2-3 people to use a single computer simultaneously. As modern computing and the internet evolved, cloud computing would become a major way we interacted with all of our favorite programs.

Understanding the Cloud

But what even is the cloud? Simply put, the cloud refers to the use and availability of storage or computing power without direct access to the primary device. Think of when you stream something from Netflix – your television doesn’t have the movie stored on its hard drive, and you’re not using a piece of hardware supplied to you by Netflix, but it is accessing the file from Netflix’s servers and streaming it to your living room, all in a matter of seconds.

Cloud computing has allowed some of today’s most major retailers and businesses to grow, including Amazon, Apple, and Netflix. Many of your favorite websites and applications likely rely on some form of cloud computing.

Benefits of the Cloud

The cloud is quickly replacing many traditional on-premises software applications, but why is the cloud becoming so pervasive?

Iterations of the cloud in the early 2000s were not widely used at first due to security issues. It was fine for storing personal photo and music libraries, but important documents were better left off of it. As the cloud gained in popularity, however, more and more steps were taken to provide additional security.

Today, the cloud is more secure than most on-premises servers due to decades of security advancements. The added security has made the cloud a more attractive option to both software developers and users. Those using the cloud for data storage and analytics purposes especially enjoy the added security cloud computing provides.

The cloud has also helped to reduce costs. There are no more costs to install, monitor, and upgrade – all updates and system corrections are immediately available as the cloud version is updated. Cloud software can be accessed through a web browser or downloaded as an application on your computer without the help of an IT or program specialist to ensure everything is set up correctly.

Depending on the type of function the program performs, onsite equipment, such as additional servers, may all be eliminated, as all data is housed on the program’s own servers. With fewer servers to monitor, fewer staff may also be required onsite to monitor and maintain the servers as well, further reducing costs.

The main benefit the cloud provides is speed. With cloud-based software, you no longer have to worry about how much disk space or RAM is available. With everything housed on a separate server, you are free to accomplish your work at lightning speeds without ever running out of memory. Cloud programs also typically allow for real-time updates to be sent to consumers as well, providing a better user experience and reducing frustrations over delays typical with onsite programs.

How Does the Cloud Affect Finance?

The cloud can accomplish many functions for financial institutions, including customer relationship management (CRM), fraud detection, and data analysis.

CRMs track member interactions and can help provide data on member needs and preferences, allowing for a more personalized experience. They can also tag member actions, allowing for targeted messaging based on actions taken or pages looked at.

Fraud detection programs analyze large amounts of member data for anomalies that may indicate fraudulent behaviors. When this is done through the cloud, fraud can be detected and stopped sooner, leading to fewer damages for the member and the institution.

Data analytics is perhaps one of the strongest services the cloud can provide. Credit unions and other financial institutions should always strive to make data-driven decisions, and that means having access to a method of data analysis. However, the server space needed to not only hold but analyze member data can be extremely cost-prohibitive, leaving many credit unions with no way to make informed decisions. Cloud-based data analysis applications remove these barriers, providing real-time data analysis at a much more affordable rate and providing great ROI by allowing credit unions to make data-informed decisions.


Financial institutions have been slow to adapt to technology generally and the cloud specifically. Lingering concerns of security remain, and many institutions have their own set ups that are not easily transferable to the cloud.

But credit unions cannot afford this hesitancy. Technology-first fintechs have made plenty use of the cloud and have reaped the benefits. Banks, too, have started to update to more technology-forward policies, including adoption of the cloud, and threaten to leave credit unions behind if they do not adapt.

The future of banking is in the cloud, there’s no way around it. Credit unions that adopt cloud-based programs now will be at an advantage to implement future updates and best practices. Because of the real-time updates to the cloud, they will be able to provide a better member experience, potentially leading to better member retention.

Trellance, the leading provider of data analytic systems for credit unions, launched a cloud-based version of its flagship product, Trellance Data Warehouse, earlier this year. Data Warehouse provides data analysis and actionable insights specifically based on credit union needs and practices. Reach out today for a product demonstration or more information on how Data Warehouse can help your credit union.

Bill Lehman is the chief marketing officer at Trellance.

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