The need for faster solutions and agility has the world moving towards cloud technology. Cloud storage has been the rage for the past couple of years, and it’s only bound to grow. Businesses across verticals are making the switch from legacy systems to cloud, in order to transition to a more robust business model.
What is cloud banking?
Bankers have realized the potential of cloud technology, and look at cloud as a driving force to digitally transform the banking industry. Cloud banking refers to using the cloud to store and access data. The cloud has proven to be a superior technology in handling data, especially in providing agility, scalability and security to banks. It enables quicker deployment of financial services, lesser expenses in rolling out new applications, and higher flexibility in adapting to market needs, these are some of the key factors that have driven banks to leverage cloud over their traditional IT infrastructure.
Factors driving bankers to move to cloud
Banks are consistently looking for faster and more agile solutions to provide financial services. How exactly does cloud banking assist bankers achieve this? In order to understand this lets first pause and take a look at the key challenges faced by banks:
Snapshot of key challenges faced by banks
- Customer acquisition and retention: Gaining new customers and keeping your current customers satisfied, ensuring that your customers seek and avail all the services being offered by the bank, and providing them with stellar service to keep them from switching to a competitor.
- Deploying services fast to market: New services and offers keep coming out regularly, keeping up with these offers and ensuring all your collaterals are updated in time requires a solution that allows you to deploy to market quickly and with ease.
- Agile innovation: The need to meet your consumers where they are, and to consistently reinvent your offerings to appeal to the current market situation forces banks to constantly be on their feet, and reinvent themselves. This requires an agile model that can quickly be rebuilt.
- Regulatory compliance: Keeping updated with all regulatory mandates and ensuring that everyone is in compliance with the latest policies.
- Cybercrime prevention: Financial institutions are consistently looking at ways to increase their security and mitigate the risk of cyber hacks.
Key benefits of making the switch to cloud
Here’s how switching to cloud can help accelerate digital transformation in the banking industry:
- Improved speed and agility: Launching a new landing page on a legacy system would not only be expensive, but also would take a bank far longer than it does with cloud technology. Cloud technology has made banks far more agile and quicker than they used to be! This enables banks to deploy new services to customers, with ease and speed. Overall this model assists banks in shortening their product deployment cycle, and simplifies the process of product testing. Cloud banks can innovate and quickly launch beta versions of their products, replacing them with newer versions, they can also handle failures by quickly scaling back, or reversing moves. Cloud essentially allows banks to test out their products in a real time scenario.
- Lower operational and ownership costs: With cloud technology, banks no longer need to invest in building a new infrastructure for each service they need to provide. Instead they can leverage pre existing apps with the help of APIs to roll out financial services quicker and with lesser operational and overhead costs. This allows banks to scale both horizontally and vertically with ease, it also gives them the flexibility to choose services that they fit as essential and unsubscribe to services that are no longer of value. Banks get the time to focus on their core competencies.
- Enhance customer experience: Banks can now use third party applications and services to enhance customer experience. From providing solutions straight to WhatsApp, to providing customers with instant solutions on their phone; banking as a service will become highly customized with this digital revolution. Cloud enables banks to build an enhanced marketplace for customers one where they can leverage new technology services and data to build a more wholesome experience for simplifying and enhancing each financial transaction.
- Provide higher security: Initially people would think of clouds and immediately worry about security threats and hacks. What used to be one of the greatest weaknesses of cloud technology, has now upturned to one of its greatest strengths. Public cloud servers belong to some of the biggest brands in the world. Microsoft alone invests over a billion dollars in security for cloud servers. This is way more than any bank could individually invest,making cloud a way more secure and compliant alternative to handling data.
Cloud offers an opportunity like no other system does, with cloud operators providing a range of cloud services the banking industry is only going to accelerate the switch in their infrastructure, and the future of banking will be paved with a hyper personalized and automated route.