The rise of cloud computing is prompting major changes in IT strategy at organizations in nearly every sector. Some companies, like banking institutions, have taken a slower approach to cloud migration due to concerns about security and other changes that such a major shift will bring.
However, shifting regulatory requirements and an evolving financial industry have made it more vital than ever for banks to move to the cloud. It’s time for all banking and financial services institutions to recognize the many ways that cloud computing can transform their organizations and position them for the future. Let’s look at some of the biggest ways that the cloud is changing banking.
It makes banks more innovative.
By nature, cloud environments are more agile than on-premises setups, which gives banks more opportunities for innovation across the entire enterprise. In the cloud, banking institutions can quickly and easily scale IT resources. Not only does this allow them to adapt to changes in customer and market demand, but it also can expedite new product launches. With the ability to access cloud resources on demand, banks can reduce spending on their own infrastructure and wait times for new services to deploy. This dramatically shortens the development time for a variety of projects.
The cloud can help banking institutions innovate in other ways as well. Groundbreaking tools such as machine learning and natural language processing are becoming more commonplace in cloud-based applications. In many cases, these cloud-based tools are designed to perform many of the mundane tasks that usually require ample IT resources or human power. By automating these tasks via solutions that live in the cloud, banking institutions can divert staff time and resources to projects that will add greater value to the organization.
It bolsters security.
Security has always been a top concern for cloud adopters. Banks must be even more careful with data security because they must adhere to regulations such as the Payment Card Industry Data Security Standard (PCI DSS), as well as FDIC and FINRA rules. However, the cloud is often more secure than on-premise IT data centers for a myriad of reasons.
Cloud providers leverage advanced protection measures to secure their clients’ data. Many cloud environments are built to comply with SOC2, ISO2001, and other rigorous standards. From encryption to SSL management to enhanced credentialing, virtualized tools offer some of the best protections against potential threats.
It connects the entire organization.
The cloud facilitates organization-wide connections that are otherwise impossible or costly for banks to achieve in an on-premises setup. Cloud platforms can serve as a single point of access for every single business unit, with comprehensive data sets and analytics tools allowing staff members to make informed business decisions together. With the addition of cloud-based collaborative tools, staff can share information across the entire organization. This empowers employees to come together and solve problems more quickly than ever before.
It improves client services.
Customer relationship management (CRM) tools based in the cloud make banks even more responsive to customer needs. Cloud-based tools enable banks to compile customer data from a range of different sources, which in turn makes it easier to improve customer service and increase sales. Moreover, the cloud allows banking institutions to deploy new customer-facing applications, interfaces, and other technologies that further improve the customer experience.
It makes banks more resilient.
Banks that rely on traditional IT infrastructure can be vulnerable to service outages and other unforeseen downtimes because they alone are responsible for maintaining their IT resources. Without access to the technologies they need, a bank can come to a complete standstill until they can get their infrastructure up and running again.
In contrast, the cloud can make banks far more resilient to disruptions by moving these vital resources off-site and into the hands of experienced cloud vendors whose main focus is to ensure that their customers’ cloud environments are performing as expected and secure. Service level agreements that organizations sign with cloud vendors include uptime guarantees that specify the percentage of time the system is guaranteed to be available; guarantees of 99.9% uptime are common.
It’s an affordable option.
Banks know better than most the importance of finding an affordable way to meet their IT needs. Cloud computing has completely revolutionized the way these organizations pay for the technology they use on a daily basis. Instead of requiring them to purchase hardware and spend more to monitor and maintain it, the cloud digitizes these resources. This allows banks to move away from major up-front IT costs and divert their spending to operational expenses. Cloud resources are typically provided via a pay-as-you-go model, so organizations can both save money and more accurately predict what their cloud costs will be over time.
It is greener than traditional IT infrastructure.
Many organizations are striving to minimize their carbon footprint, and banking institutions are no exception. Those that migrate to the cloud do more than save money by reducing their dependence on physical IT infrastructure. They can also reduce their energy consumption.
Banks and other organizations that move to the cloud can also eliminate much of their paper trail. Instead of relying on paper-based processes and documents, they can move these workflows to the cloud. The impressive accessibility of cloud platforms enables staff and customers to access the information and applications they need at any time—without consuming paper in the process.