In the ever-evolving digital world of data management and analytics, businesses face critical decisions when it comes to choosing the right platform for their Identity Verification (IDV) solutions. The debate between on-premises and cloud IDV solutions has gained prominence as organisations seek to strike a balance between necessary resources, security, flexibility, and regulatory requirements. In this article, we will explore the strengths and considerations of both on-premises and cloud IDV and AML solutions to help you make an informed decision for your business.

Cloud Solution Benefits


Many people assume that on-premises solutions are safer as the data does not go through third parties. However, it is important to remember that IDV and cloud service providers have years of experience and qualifications in data storage. Which often means that sensitive information is even safer with cloud solutions, especially since your company would still remain the owner of any data.

Scalability and Flexibility

Cloud-based AML solutions offer unparalleled scalability, allowing organisations to adapt quickly to changing workloads. This flexibility is especially beneficial for businesses experiencing fluctuating data volumes or planning for future growth, as cloud platforms can easily scale resources up or down as needed.


It is important to remember that cloud-based solutions come with experienced professionals attached to them. Rather than building everything from scratch with on-premises solutions, you can rely on the competence of a provider that already adheres to all legal requirements. 

Cost Efficiency

Cloud-based AML solutions eliminate the need for substantial upfront investments in hardware and infrastructure as they require less resources and make the overall total cost of IDV significantly lower. This cost efficiency is particularly attractive to small and medium-sized enterprises looking to leverage advanced AML capabilities without a significant financial burden. Maintenance costs also tend to be significantly lower with cloud solutions. 

Collaboration and Accessibility

Cloud services promote collaboration among geographically dispersed teams by providing seamless access to data and analytics tools from any location with an internet connection. This accessibility enhances operational efficiency and enables real-time decision-making, fostering a more agile and responsive organisation.

No Additional IT Resources

A cloud environment for AML software allows for fast deployment and integration with no additional IT resources, providing access to already existing databases, meeting compliance requirements. On top of this, Ondato’s cloud-based solutions allow you the option to work with our trained KYC agents during the onboarding process, which in turn saves time and effort.

On-Premises Solution Benefits

Regulatory Control

Financial institutions face stringent regulatory requirements in the fight against money laundering. An on-premises solution allows companies in countries with data centres to ensure compliance with local and international regulations and access management, and maintain control, minimising the risk of regulatory penalties.

Data Protection and Localisation

In general, on-premises IDV solutions offer complete control since customer data is stored within the organisation’s physical infrastructure. This can be crucial for institutions operating in regions with strict sensitive data regulations, allowing confidential information to stay in-house. 

Customisation and Integration

The on-premises model allows for greater customisation to meet specific requirements of the company. Companies can tailor their AML solutions to integrate seamlessly with existing infrastructure and workflows, ensuring a smooth transition and minimal disruption to daily operations.

Compliance and Data Sovereignty

Certain industries, such as finance and healthcare, are subject to stringent compliance regulations that require data to be stored within specific geographical boundaries. On-premises solutions provide organisations with the ability to maintain compliance and adhere to data sovereignty requirements more effectively.

Before you make your final decision, consider the following: 

On-premises pros:

  • Regulatory compliance
  • Data localisation 
  • Customisation
  • Data sovereignty 

On-premises cons:

  • Significantly higher costs 
  • Harder maintenance
  • Less scalability and flexibility
  • Requires IT resources

Considerations for Decision-Making

Data Sensitivity and Regulatory Requirements:Evaluate the sensitivity of your data and assess if regulatory requirements necessitate on-premises storage for compliance.
Scalability and Future Planning:Consider your organisation’s growth trajectory and whether a cloud-based solution aligns with your scalability requirements.
Cost Analysis:Conduct a thorough cost-benefit analysis, factoring in both upfront and ongoing costs associated with each model.
Integration with Existing Infrastructure:Assess the ease of integration with your current systems and workflows, ensuring minimal disruption during implementation.

Ondato’s Cloud vs. On-Premises Solution

Ondato is a service provider that can fully adapt to your needs, whether you are interested in cloud or on-premises data storage. As we’re dedicated to helping our clients all over the world, we understand how regulations may differ from country to country. Our on cloud solutions are fast, AI-based and require no additional IT resources. We’re also happy to supply on-premises identity verification. Ondato’s convenient, easy-to-use process is just what you need to ensure a smooth onboarding process. 


Choosing between on-premises and cloud IDV solutions is a nuanced decision that requires careful consideration of an organisation’s unique requirements, industry regulations, and future plans. While on-premises solutions provide control and security, cloud-based alternatives offer scalability and cost efficiency. By weighing these factors thoughtfully, businesses can navigate the complex landscape of identity verification and implement a solution that not only meets their current needs but also positions them for future success in the ever-evolving digital realm.

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    Several countries over the world require on-premises data centres. This includes countries in Asia such as Singapore and China. Qatar and Saudi Arabia require data centres to stay in the region. The US requires certain data to be processed in the country, while Brazil has additional requirements for data processing.
    On-premises IDV solutions are hosted locally within an organisation's infrastructure, providing direct control and management. In contrast, cloud-based IDV solutions leverage remote servers and are accessed over the internet, offering scalability and accessibility without the need for on-site hardware.
    On-premise identity refers to managing and verifying user identities within an organisation's internal network or infrastructure. This involves maintaining control over authentication processes, user data, and identity verification methods within the organisation's physical or virtual environment.
    An on-premise cloud example could be a private cloud hosted within an organisation's own data centre with personal data storage. This type of cloud infrastructure allows the organisation to have dedicated resources for their exclusive use while maintaining the benefits of cloud computing, such as scalability and flexibility.
    The term "on-premises" generally means that something is located or operates within the physical boundaries of an organisation or facility. It is often used in the context of software or services that are installed and run on the premises of the user or organisation rather than being hosted externally.
    Identity verification is the process of confirming that an individual is who they claim to be. It is commonly used in various contexts, including online accounts, financial transactions, government services, and more. The aim is to ensure that individuals are who they say they are, preventing identity fraud, theft and other illicit activities.