Updated: October 26, 2022
With technological progress and the pandemic’s impact, phenomenal levels of digitalization have been taking place in every industry before our eyes. The financial sector is no exception. Traditional, pre-lockdown patterns can no longer keep pace with customers’ fast-evolving needs.
Indeed, cloud adoption has become a real game-changer for financial organizations. It helps them ease their operations, function more efficiently, and delve into generation-defining technological capabilities such as blockchain, AI, etc.
After decades of on-premise data storage, financial institutions leaders have finally got ready to leverage numerous benefits of cloud computing.
SECURITY
Security is a major concern for financial institutions, as the data they carry turns out to be the target for cyber criminals more often than in any other industries.
For most people, who are not that big of technology nerds, it’s difficult to accept that ‘somewhere out there’ there’s ‘something’ you can trust more than your inner systems. However, that’s true.
Within a traditional on-premise IT set up, the odds that your system will be brought down by a cyber attack are obnoxiously high. Meanwhile, cloud service providers take major responsibility for the protection of the data, applications, and infrastructures involved in cloud computing. Not only do your operations become more secure. It’s also your data that is backed up to multiple servers so there’s no chance that it’ll be gone forever because of a security breach or a natural disaster.
DATA STORAGE
Financial institutions generate incredible amounts of data. Millions of clients’, investors’, vendors’ contacts, which have to be sorted out and stored within a CRM or other database. To be able to keep all this information, you should either ramp up the hardware (which doesn’t seem to be all that great of an idea) or host your database in the cloud. Cloud technology allows you to store as large an amount of data as you want and scale up and down according to your needs.
BIG DATA
Big data is a great opportunity but also a huge stumbling block for financial service firms. The thing is, it’s relentlessly growing. Eventually, your on-premise systems won’t be able to handle the volume of data and keep up with the rapidly increasing analytics requirements. In such a case, it’s time for your big data to go to the cloud. The cloud can help process and analyze big data faster, leading to insights that can improve your products and business.
REDUCED COSTS
Having the infrastructure on site means investing heavily into it. Cloud technology allows to cut down on those investments by:
- reducing maintenance costs. Expenditures, spent on running and managing your own servers, are often unanticipated. Whereas cloud service providers fulfil your needs for a fixed price. At the same time, cloud pricing is dynamic – it depends on an increase or decrease in required computer capacity and facilitates granular spending control.
- saving energy. Your in-house servers might not be used optimally. As a result, energy consumption continues to increase. Cloud computing, on the contrary, is way more efficient in terms of utilization and consumes less power.
- not dealing with IT issues. After moving to the cloud, you won’t have to worry about specialists to deliver your IT needs. That’s what your cloud service provider will take care of. So you either don’t need to host your own IT team at all or you can redirect the existing one to work on other business areas.
- eliminating redundancies. To keep things up and running single hardware is not enough. There has to be an alternative one you can rely on in case the system fails. Not only buying additional hardware adds to overall costs, but maintaining it on a regular basis is not cheap as well. Using cloud technology seems to be a better option since cloud service providers typically depend on multiple data centers and ensure resiliency by replicating your data.
REGULATORY COMPLIANCE
Meeting ever-changing regulatory requirements is a raw subject matter for financial institutions and, at the same time, critically important.
Regulations in the financial service industry are increasing. Banks are spending a lot of money and effort to make sure they’re compliant with the industry standards. New regulations require firms to collect, store, process, and report more detailed data across multiple sources.
This is more easily done with flexible and accessible cloud data management.
Cloud vendors take very strict measures to guarantee that in financial services, compliances are not violated by either party.
BETTER CUSTOMER EXPERIENCE
Consumers continue to expect much from their financial institutions. This is especially true when it comes to service. Many want a more personalized experience.
To provide it, firms have to get and analyze feedback from the customers easily and without delay, convert this information into insights, and adjust their products based on customers’ reactions.
Cloud computing makes the process of developing and launching new products easier and quicker, which is extremely important for the industry, notorious for being slow at meeting customers’ requirements.
Embracing cloud technology is the first step towards a fast-moving digital future of Big Data and AI solutions. Solutions that will help financial companies become more efficient and customer-centric than they have ever been able to imagine.
