Cloud and data enabled transformation in banking

“Banking technology has made it simple and efficient to invest in good causes.” – Mark Skousen

The world of technology is ever evolving. Cloud and data are not emerging trends anymore; they are the present, which will continue to drive advancements and innovations across industries. Modern technology constitutes a critical tool for banking organisations and financial institutions to stay competitive in today’s challenging business environment.

The technological advancements have been disrupting industries since the beginning of the internet revolution, and the banking sector is no different. Challenges of new consumer demands coupled with competition from outside the traditional banking industry are pushing the traditional banks to leverage their wealth of consumer information and analytics and enhance their customers' experiences.

To achieve a consistent omni-channel experience and a competitive advantage over clients through digital transformation strategy, banks are building and leveraging private clouds. While cloud and big data drive the transformation of banking functions, the organisations continue to follow the reliable path for enhancing flexibility, agility and ultimately, customer experience.

How the Banking Industry is Benefitting from Could and Data Revolution

Infusion of Flexibility

Technology helps banks to be adaptable and scalable and stay ahead in the competitive environment, allowing them to upgrade and respond to market demands as quickly as needed. To be able to update everything remotely without having to worry about time constraints helps streamline operations.

Improved Business Agility

Major banks heavily rely on traditional systems, which restrict business agility. The rise of the digital economy has triggered the need for the banking sector to integrate new digital technologies in order to respond to changes in consumer behaviour. Many banks are enhancing their mobile apps with new features, pursuing a mobile-first strategy. It helps banks to reallocate resources towards innovation and pursue fast delivery of products and services to markets.

Risk Mitigation

Cloud helps lower risks associated with traditional technology including redundancy and resiliency concerns, among others. Additionally, it boosts the security of banking operations.

Safety and Reliability

In the financial industry where safety and security are a driving force, cloud services are more important than ever. Virtualized applications with options like data encryption, SSL management, and enhanced credentialing, are doing wonders for the banking sector. Data and cloud-enabled safe and secure banking services are helping build trust and confidence in customers.

Cost Benefits

The cost savings are significant. Cloud does away with the requirement of initial capital-expenditure for traditional IT infrastructure. Moreover, it allows banks to manage computing capacity more efficiently during peak customer demand, which takes immeasurable time if done manually. In fact, cost benefits also arise from the resultant improvements in business efficiency due to cloud adoption.

Challenges

The banking industry is grappling to keep up with rapid technology advancements. The challenges specifically for cloud migration in banking include regulatory, security and compliance concerns; third party risk; lack of a clear cloud strategy and inability to accurately estimate the total cost of ownership. The absence of core application solutions has prompted most banks to opt for mini 'private' infrastructure clouds.

Banking sector organisations that manage to overcome these challenges will be well-positioned as industry leaders in the years to come.

Summing It All Up

Digital transformation is a vital competitive component in today’s challenging marketplace of the financial industry. Cloud and data transformation is not an easy thing for banks but the potential benefits outweigh the challenges and risks associated with the transformation process. The transformation is vital to compete today and in the future.

By Amit Khandelwal, SVP and Head IT, Visionet Systems India