Introduction
In an era where digital technology has crept into every corner of human life, we have gradually adapted to operations revolving around one-touch technology. Meaning, today we can interact, manage, or even make purchases right at our fingertips. To do this, one thing that cannot be denied is the birth of cloud services that simplify the way we handle big data and workflows. In light of this, many businesses have long applied cloud computing to strengthen their infrastructure and promptly respond to the needs of their customers.
Now more than ever, cloud computing in financial services is a solution that needs more widespread attention and investment. Due to the specificity of this industry, financial institutions need to enhance their services in aspects such as security, modernization, and seamless transactions. How can banks and investment corporations enhance their cloud adoption experience to compete? Let’s discuss with us in this article.
How does cloud computing in financial services become pivotal?
Even though cloud computing for banking is progressing somewhat slowly since this is the field where the leaders are most reluctant to take risks. Partly because of their dependence on legacy systems and on-premises infrastructure, most banks only consider cloud computing as a potential alternative, depending on the situation. However, as the cloud technology trend increasingly proves its position, financial banking has begun to absorb many efforts from public computing services to save time and budget.
Let’s take a look at some of the powerful capabilities that cloud computing can help banks with:
Reduced costs
Enterprises can optimize expenses for infrastructure thanks to effective support from cloud computing in financial services.
The reliance on on-premises systems, which can keep data safe, is still widespread worldwide, but in terms of adaptability and scalability, this will take a lot of effort. Especially for banks or financial institutions that need to decentralize complex and enterprise-level information, the cost of infrastructure changes will be more than you imagine. Besides, updating the entire management system can cause prolonged downtime, causing discomfort to customers.
On the other hand, adopting cloud computing for banking can save much money due to pay-as-you-go strategies. With these cloud services, financial businesses can choose the scale to suit each need, such as storage, system maintenance or upgrading plans.
Not to mention, with comprehensive services provided by third-party cloud providers, firms will not need a specialized team. Leave complex technical issues to the experts and focus on your core business efforts. Definitely, the transition to this managed service can facilitate financial activities thanks to flexible inherent redundancy, aiming to improve the reliability of banks.
Increased scalability
The competitive landscape in the digital age has pushed many banking services to transform and expand their scale. Cloud computing in financial services has created a turning point in easily restructuring the system. Compared to traditional approaches, cloud services will change the game when financial businesses face the ever-changing market turntable. Once you can keep up with the rapid pace while still ensuring high and uninterrupted traffic, that’s when you rise above your competitors. And when the market goes down, you can easily narrow resources to optimize costs.
Strengthen customer experience
Cloud computing in financial services provides access to users from flexible devices and locations. This can increase customer preferences as cloud services have low latency, fast response and secure transactions. More than that, cloud computing for banking today also offers advanced customer behavior analysis and processing, from which businesses can adjust their business and customer service strategies from data-driven resources. This improved roadmap not only delivers personalized experiences for customers but also increases conversion rates for financial institutions.
Speed up the initial phase
As technology changes daily, Fintech enterprises must always explore the potential power of the cloud environment to foster the rollout of brand-new features. At the same time, to always be at the forefront of digital banking services, a fast product launch period is also a prerequisite.
There will be no more barriers when applying the power of cloud computing for financial services when it always comes with the attributes of real-time, immediate response, and agility. Facing the characteristics of a high-risk industry, cloud-based infrastructure caters to the ability to recover and back up large volumes of data at low costs. In addition, there are many features that help banks prevent future-proof operations.
Data Security
Compliance and data security are always concerns of users when choosing financial services. To create credibility in this aspect, cloud computing for banking is always at the forefront of the task of building network security measures.
The main structure of cloud computing in financial services is data-centric, so this system will continuously analyze to detect vulnerabilities. In addition, whenever there are warnings of illegal breaches in a financial system, the cloud service will prioritize security by recommending timely solutions.
A characteristic of the cloud system is the ability to encrypt data and control access. When businesses own vast amounts of data such as baking and financial institutions, sensitive data is now converted into an unreadable format to prevent the risk of information theft. Additionally, only experts and dedicated processing teams can access the financial data warehouse.
Advanced data control & migration
Cloud computing in financial services facilitates uninterrupted operations for data networks, sharing as well as banking transactions. More than that, the cloud environment empowers enterprises to approach CRM and ERP separately to easily control internal systems as well as synchronize data across departments. Commonly, cloud computing for banking is deployed under the SaaS model, helping control and transfer data more effectively.
Even more, data migration in this digital transformation era cannot lack the presence of world-leading technologies like AI (Artificial Intelligence) and ML (Machine Learning). With cloud solutions, financial institutions can quickly respond to market trends with Fintech solutions and flexible payment gateways. The combination with emerging technologies will help banking organizations exploit many breakthrough and competitive financial services.
Consider Appropriate Cloud Operating Models for Enterprise-Level Infrastructure
A survey conducted by Deloitte showed that 76% of executives admitted that the presence of cloud computing empowered them to enhance customer experience. Beyond that, 74% of them also acknowledged the ability of cloud computing for banking to help them launch new products and services more swiftly.
The above positive numbers partly show the outstanding ability of cloud services from the management perspective of entrepreneurs. Since cloud computing has gradually become an indispensable solution, let’s uncover some models when businesses apply them to their business structure:
Virtual Captives
This is an off-the-shelf model implemented by specialized centers and resources. Financial institutions will hire these services to operate their cloud systems. This outsourcing solution can combine the potential of captive and third-party services.
Staff Augmentation
Another outsourcing option that helps optimize internal resources is staff augmentation. Businesses will hire IT experts from outside on a term basis or sign long-term contracts. These personnel have the appropriate skill sets to coordinate with internal teams to implement cloud projects for businesses. This approach allows real-time response as well as complete control over the augmented staff.
Outsourcing vendors
With this model, firms may hire offshore vendors at a lower cost while maintaining a high standard of service. These cloud-based IT services minimize upfront hardware or software investment expenses and are delivered remotely over the Internet. Financial corporations may get a competitive edge in terms of scalability, technical innovation, and speed to market by hiring competent outsourcing companies.
How Can Cloud Computing In Financial Services Support Banks?
To get into the nitty-gritty of what cloud-based services offer specifically for banking ventures, we’ll give you several helpful examples.
Fraud detection
Cloud computing for banking develops its potential in the context of analyzing and processing information from huge amounts of data. Because this is an industry with many risks in terms of fraud, information theft, and unauthorized intrusion, cloud services based on strict security compliance can promptly detect suspicious behavior. This can prevent the least possible damage to the customer.
CRM Improvement
Typically, customer needs when using banking services are very diverse, requiring financial institutions to understand insights and connect with their target audience. Many banks have difficulty assessing the level of service satisfaction as an end-user, so CRM is an integration that cannot be overlooked when applying cloud computing. By tracking every interaction across phases in realtime, financial institutions can best serve their customers with custom-made services.
Salesforce, Mailchimp, and Zendesk are some examples of cloud-based software that we propose to reach customers.
Seamless mobile payments
In addition to processing debit and credit cards issued by major banking institutions, emerging BFSI businesses can consider reputable cloud solutions such as Visa, Mastercard, Stripe, etc. Not only because of the swift integration feature, but financial institutions also have a better understanding of in-depth knowledge related to security in finance.
Transition to IaaS
The cost to maintain and secure onsite and legacy data systems is increasing, many banks of all sizes have turned to developing software and applications according to the Infrastructure as a Service model. Some well-known cloud service providers for financial enterprises are Microsoft Azure, Google Cloud Platform, Amazon Web Services, etc. Check out these state-of-the-art cloud services to level up your digital services while continuously upgrading your software and data systems at a reasonable cost.
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Final thoughts
Given the specific nature of the banking and financial industries, it may be argued that involved enterprises must proceed with caution and discernment in every step.
Financial organizations have discovered how to integrate cloud computing technology into their data processing and operations systems due to the insightful information presented in this article. Furthermore, in order to obtain a package solution that is affordable, secure, and up-to-date with industry trends, several financial institutions have also selected companies with a high level of competence in cloud services.
With 16+ years of expertise in implementing and consulting cloud-related technologies, AHT Tech confidently brings custom-built solutions to banks and financial businesses to achieve digital transformation goals. Contact us right now for further discussion with our wide-ranging cloud services.
