In terms of business development, Big Data has significantly influenced almost every industry. Banks, manufacturers, stores, hospitals, insurance agencies – all started to successfully implement and use Big Data technologies for gaining their goals. New solutions are introduced each year for the banking sector. However, cloud technology has become one of the most transformative innovations in this industry.
“We designed an architecture that allows the firm to bend to where our people are versus having everyone bend to where the firm is”.
Don Duet, global head of the technology division at Goldman Sachs
Cloud proves to be a good innovation for better data generation and processing. Banks loved cloud solutions for their scalability, security, and agility. Cloud applications have made batch processing, data storage and sharing, data analytics much easier. Banks are now able to save more and work more effectively.
Do you know about the major needs of banks today? Check out the latest trends here.
According to the British Bankers Association, here are top three drivers that led banks to use cloud-based services:
Despite the undeniable benefits of cloud computing technology, banks are slow in fully adopting the technology. In July 2019, Forbes cited several sources, including the Financial Times. All those mentioned that the majority of financial institutions lag behind their goals to embrace innovation.
Among the main blockers on the road to cloud adoption, banks distinguish security concerns. However, anti-cloud bank executives, probably, don’t know that companies providing cloud solutions don’t store data in the cloud.
Similarly, regulatory implications affect the speed of cloud adoption. For example, banks should guarantee the continuity of services for their clients while migrating to the cloud. In case of any failures with cloud services, banks have to ensure that they are able to turn back to the in-house databases.
Recently, the European Banking Authority offered a few recommendations to financial organizations in terms of migration to the cloud. The top things they drew banks’ attention to were data protection, risk mitigation, and other security concerns.
As you can see, the adoption of cloud-based technology in the banking industry requires the consideration of interrelated interests of three sides – banks, regulators, and cloud services providers. The mutual efforts of all the stakeholders should bring fruitful results and accelerate the process of migration to the cloud.
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If you are about to adopt cloud technology in your bank or other financial institution, you should be aware of the main steps and rules to adhere to.
To get the highest value of your investments into new technology, you should carefully consider the strategy for moving to the cloud. Actually, there are three options for banks to embrace the new digital state. Below are the models you can implement depending on the current state of your technology.
Without installation headaches, SaaS has attained the greatest popularity among the cloud-based solutions. The solution can be easily accessed from any country round the clock. The applications built as a SaaS model are completely supported technically by the people who developed them. Thus, you won’t need to constantly acquire new skills to professionally support the software.
With a SaaS solution for banks, you don’t need to have an IT department – you actually save your costs and resources for something slightly more important. You also don’t need to worry about the compatibility of SaaS with desktop or mobile, because as long as access the app, you access the web. This type of software for banks is a subscription model that gives the best scalability capabilities. It can be used by as many customers as it’s possible.
Lastly, if you think of the value of SaaS for your financial organization, consider the growth. There’s a direct correlation between the value and the growth. The more customers you have, the more you earn. It matters how quickly you can get your clients on board and affects how fastly you’ll get your revenue. To sum it up, here are the top benefits of using SaaS:
PaaS is an excellent way to replace your internal IT department for offsite developers providing cloud services. Francisco Gonsalez, one of the CEO of a large bank, believes that a SaaS model is the future of the banking industry. The major reasons for transforming from traditional banking to cloud services are a long time to market and inflexibility. At the same time, Gonsalez as many other banks’ executives considers that in-house developers must work to provide requirements for the offsite teams rather than create infrastructure for building apps in house.
PaaS creates an environment for programming on a specific language, syncs it up with an operating system, a database, and a server. This model provides the environment for users to build and run their apps. Here, you can manage data and different app resources whereas the vendor takes care of other resources. To sum it up, below are the main pros of using PaaS:
IaaS can be used by multiple users as all the computing resources, infrastructure and architecture are in the virtual environment. The resources of IaaS include virtualization, data storage, networking, and servers. These resources are usually managed by vendors while users can manage apps, data, middleware, and runtime. The major benefits of using IaaS are as follows:
Among the most vivid examples of companies offering cloud services, there’s Amazon. Its Web Services offers IaaS and PaaS. iCloud, another example of cloud services, is offered for Apple products. It provides backup and storage capabilities. Windows Azure offers all three models of cloud computing for its users. Google cloud is another solution that provides collaborative working, data storing, and other services.
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According to Accenture’s managing director, Sergi Calvet, the sooner banks will adopt cloud technology, the better. Bank executives that invest in new technologies today will get their ROI soon as there’s a great demand for scalability and global growth in the banking sector. Cloud offers unique opportunities like analytics tools to learn what your customers buy, how much they spend, and where.
Today, banks rethink and reinvent how they are providing their services to customers and managing their internal and external operations. Cloud technology has become a driving force of development for financial institutions. It can seamlessly satisfy the demand of banks’ customers – giving more personalized services, providing instant online access, allowing them to get access from any device and at any time of the day.
Want to create a highly flexible shared environment in your bank? Tell us about your challenges and we’ll come up with a solution. Our company has over 8 years of experience in developing solutions for the financial sector. Starting from thorough business analysis, we guide our customers through the entire development life cycle until they get a completely functional product.