Financial institutions are known to be cautious while adopting digital transformation initiatives due to security concerns. Despite these concerns, banks are beginning to move towards cloud computing. The outbreak of the Coronavirus pandemic has further accelerated this advancement..
In such a scenario, the banking industry needs to innovate new ways to bring their services to the customers while maintaining the same level of customer experience and engagement. Cloud plays a significant role in ensuring that banks have advanced infrastructure, modernized applications, and virtual tools to not only meet but exceed customers’ expectations.
Let’s look at the following ways in which cloud computing is empowering the banking industry:
Cost Savings and Usage-based Billing – Cloud computing ensures that banks do not invest heavily in dedicated hardware, software, and related manpower. It is much easier for banks to update their applications landscape and underlying infrastructure on cloud. Further, cloud offers pay-per-use model which allows banks to pay only for the services they require and use.
Business Agility and Flexibility – The flexibility of cloud-based operating models allows the banking industry to experience shorter development cycles for new products. This enables banks to swiftly develop new products to cater to ever-evolving customer demands. Since the cloud is available as a service model, less infrastructure investment is required, saving initial set-up time and cost. Banks can also move their support and maintenance services to the cloud, including software patches, maintenance, and other computing issues. As a result, they can focus more on core business operations and augmenting customer experience.
Augmented Security – Security is a grave cause of concern for financial institutions. For banks, it turns out to be the biggest hurdle when embarking on a digital transformation journey. However, if they opt for the right service provider then cloud can prove to be more secure than on-premise infrastructure. On-premise infrastructure is vulnerable to internal and external security threats, whereas cloud offers security measures such as encryption, redaction, SSL management, and enhanced credentialing for ensuring data security. Furthermore, it undergoes regular penetration testing and follows stringent security guidelines laid out in Service Level Agreements (SLAs).
Enhanced Efficiency – Cloud adoption increases banks’ ability to innovate by providing dynamic platform, faster development and deployment cycles, and comprehensive reports and dashboards. The standardization inherent in the cloud makes it easier to integrate new technologies to simplify functions. By aligning technology and business expectations, cloud drives away complexity and ambiguity.
Better Customer Experience – COVID – 19 has compelled the banking industry to innovate their digital assets to redefine customer experience. In order to stay ahead of the game, banks need to practice contextual targeting. With enormous storage and computing power, cloud enables banks to develop new-age technologies equipped systems to churn out better insights about customer’s taste, behavior, and preferences. This leads to creation of customized services and contextual marketing.
Business Continuity – When banks opt for cloud, the service provider assumes the responsibility for managing technology. The service provider is accountable for maintaining the highest level of data protection, threat assessment and disaster recovery. Cloud computing also provides a high level of redundancy and back-up at lower price than solutions hosted and managed on-premise.