When we think of banks, we often associate them with brick-and-mortar institutions with steel vaults and marble architecture. Stable, reliable, secure and highly trustable. With the revolution and fast modernisation of technologies, banks are adapting alongside as well, incorporating online services for consumers and businesses.
Now, stability, reliability and security have become areas of concern. Can we combine the rock-solid traits of banks, with faster globalisation and modernisation? The answer might just be cloud computing, which has evolved into a secure and compliant platform for financial institutions (FIs) across the years.
What is Cloud Computing?
Cloud computing is the delivery of computing services on demand via the Internet. These services include but are not limited to servers, storage, databases, processing power, and software. This is an attractive alternative to organisations, as it relieves them from the need, hassle, and cost of owning and maintaining complex IT infrastructures. Additionally, cloud computing enables collaboration between organisations and businesses globally.
There are a few different options when it comes to cloud computing. Public clouds are owned and operated by third-party vendors. Microsoft Azure, Amazon Web Services, and Google Cloud Platform are popular examples of public clouds. Private clouds, on the other hand, provide services exclusively to a single business or organisation. Due to the nature of private clouds, organisations can choose to host the cloud on-site or pay cloud service providers (CSP) to host a private cloud. Hybrid clouds combine two or more public and private clouds, allowing data and applications to be shared between them, thus empowering organisations and businesses with greater flexibility in terms of workflows, deployment options, and the optimisation of their existing infrastructure, regulatory compliance, and security.
Why is it Essential for Financial Institutions?
As aforementioned, FIs rely on modern technology to deliver real-time customer support. This requires the use and upkeep of legacy systems and mainframe computers to process large amounts of data. It is essential for FIs to maintain their on-site infrastructure, however, it requires huge capital and expertise. If the maintenance of the infrastructure is neglected, FIs are at a disadvantage when it comes to competing with more innovative competitors.
A 2019 study conducted with 88 FIs before the COVID-19 pandemic has shown that 54% of the participants predicted that at least 75% of their workloads would be run on cloud services in the upcoming 5 years. The COVID-19 pandemic put the resiliency of organisations and businesses across the globe under the spotlight, further solidifying the need for organisations and enterprises to digitise their business processes.
“There is no business strategy without a cloud strategy.” – Milind Govekar, Gartner VP
Cloud technology is the crucial factor in driving different digital experiences, so much so that Gartner predicted that by 2025, more than 85% of organisations will adopt a cloud-first strategy and that over 95% of new digital workloads will be implemented on cloud-native platforms, a substantial increase from 30% in 2021.
Key Benefits of Implementing Cloud Technology in Your Business Processes
- Fulfil Regulatory Compliance & Reliable Security
Cloud computing technology can help organisations understand how their current infrastructure and capabilities may hinder their ability to identify and deal with potential risks and vulnerabilities. Cloud service providers (CSP) usually bear the responsibility for the cloud’s security, as it is the core of their business models. They have the resources and expertise to keep their systems safe as evidenced in their annual expenditures, ensuring fewer security failures and incidents as compared to traditional on-site infrastructures. Moreover, CSPs can help FIs fulfil the ever-changing regulatory reports in multiple operating jurisdictions, a critical solution for an industry that enables cross-border transactions.
- Optimised Operations & Low Upfront Costs
Should a FI employ cloud computing technology, a hybrid multi cloud solution that encompasses the flexibility of the public cloud and the security features of the private cloud and on-site infrastructure is the best way to go. This allows the FI to extend beyond the capabilities of their on-site infrastructure, while also not limiting themselves to a single CSP. An open hybrid multi cloud architecture offers process portability and data accessibility by allowing workloads to run on many platforms in multiple interoperable domains, reducing data silos and opening up new ways of analyses of insights. Not only that, CSPs provide a wide variety of tools that allow FIs to easily recalibrate and manage their models and set up new tests. Cloud computing technology is capable of being fed with real-time data continuously, a feat unachievable by many legacy systems, enabling models to be more cutting-edge and precise.
The flexibility does not stop here. FIs have more control over their tech expenditure, as they have the option to move away from heavy up-front capital spending to a more operational-focused payment plan. Moreover, CSPs are responsible for upgrading their systems, relieving FIs from spending hefty resources and time configuring new upgrades for their on-site legacy systems.
- Creating New and Seamless Customer Experiences
Following the topic of real-time data analysis, customer data can be used to gain insights in a similar manner. The results gathered can be the groundwork for a degree of personalisation and engagement with each individual customer across all channels based on their behaviour, another feat typically unachievable by many legacy systems. Additionally, FIs can respond to emergencies such as physical outages and disruptions more quickly. The tools provided by CSPs as mentioned above, such as machine learning, Internet of Things platforms, and augmented and virtual reality, just to name a few, can be leveraged by FIs to build innovative strategies for creating new customer experiences.
“The biggest risk of cloud computing is the risk of not moving to the cloud.” – Institute of International Finance
JurisTech, your Preferred Partner
Here at JurisTech, our transformational enterprise software solutions such as loan origination and debt collection system have the flexibility to be on cloud platforms as well. We want to be ahead of the curve with our clients and offer the best credit management solutions.
We also offer a few cloud-based products for small and medium enterprises (SMEs) such as
- NexColl, a one-stop collection software solution for debt collection agencies.
- CollectXpress, a cloud-based accounts receivables (AR) collection software that manages and keeps track of all invoices without ever missing a customer’s payment.
- CloudCore, an end-to-end loan management software that helps manage, track, and automate all loan applications in a single platform.
With the ever-changing and fast-paced digital landscape, it is crucial for FIs and enterprises to stay ahead of the game. Interested to learn more about our products on cloud platforms? Connect with our team today at firstname.lastname@example.org.
JurisTech (Juris Technologies) is a leading Malaysian-based fintech company, specialising in enterprise-class software solutions for banks, financial institutions, and telecommunications companies in Malaysia, Southeast Asia, and beyond.