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Cloud Technology and Banking : Financial Services and Banking of the Future

by shashank.prpro

For most of us, bank visits have been a tiring task. Age-old working modules, processes and legacy systems are few things that increase the difficulty for every customer visiting banks. For decades, the banking industry was constricted by traditional systems, segmented databases and local branches.

But that’s not the case any more. Given the new landscape and difficulties of an ongoing pandemic has pushed the banking sector to consider agility with the cloud. Remote working, lockdown, customer retention and revenue generation are few factors contributing to this faster adoption of cloud tech in banking. The industry’s need for innovation and seamless technology has compelled quicker adoption and migration to cloud technology.

The new banking landscape – How Banks are adopting cloud technology 

Motivated by the advances in FinTech and cloud technology, the banking industry is adopting cloud to improve:

  •    Agility
  •    Speed
  •    Availability
  •    Product
  •    Services
  •    Revenue
  •    Customer experience

In the new age banking services are now available to every customer at the touch of a button.

Cloud adoption in the banking industry –  The Challenges

Agility was slowest in banking compared to other industries. Concerns over data loss, security and privacy became major blockers. Other factors that contributed to slow cloud technology adoption in banking included –

The fear of the unknown The all-in perception and assumption of complete restructure along with misperceptions about the cloud hindered the transition.

Not that secure – Belief in the security of on-premises data store points and distrust in cloud systems’ ability to data protection also added to the slow adoption.

Resource management – Allocation of leadership, operational and IT resources required planning and investment making it a tough process.

Operational infrastructureLegacy old systems and processes caused trouble.

How is the banking sector overcoming cloud adoption challenges?

Due to the accelerated demand, the banking sector was compelled to look beyond the above-mentioned challenges and find solutions that can ease the cloud migration process. Confidence presented by early adopters and the rise of cloud service providers also gave a much-awaited boost to the process. However, the shift from a traditional model to the cloud requires an organisation to inspect and identify obstacles in three key areas:

  •    Comfort & Confidence
  •    Resource Management
  •    Interoperability

Once the problems were identified it was resolved by –

Steady and gradual transition – This helped decision-makers break the barrier of complete restructuring and transition became an easy process.

Understanding cloud models – Security concerns were solved by understanding cloud models (private, public & hybrid) and choosing the best suitable one to secure the data.

Cloud service providers – The issue of resource management was solved by cloud service providers by end-to-end management of the process and simultaneously training in-house teams.

Infrastructure management – With cloud-based technology and cloud service providers it became easy to create a co-existing infrastructural network and advance steadily to create future-ready options.

Custom APIs and tools in cloud technology help banking enterprises create an open, standardised, modern platform that caters to custom digital needs at every touchpoint.

The way forward

Cloud adoption is no longer an IT strategy. It is a business strategy that if leveraged properly can not only stimulate positive customer experience, product & service distribution but also overall revenue.

For ages, banking has witnessed reliance of both customer and commercial on the digital medium to access financial products. However, with the recent pandemic, the digital shift has been marvellous.

Starting from quick cloud tech adoption, digital transformation, enhanced customer experience, remote access to services and products became new means to survival. Ability to innovate and develop new products quickly became key to beating competition and success. Cloud tech enables quick and speedy response time with low technical and financial risks for banks.

Today, banks that can crystallize a strong cloud strategy and make the business transformation a reality will open new business dimensions.