In contrast to other business sectors, the banking industry has been relatively slow in adopting and harnessing the massive potential that cloud computing is delivering in modern times. While there may be questions relating to regulations or due to the financial data that banks deal in, the banking industry has been moving slowly on a ‘wait and watch’ mode for the past few years.
It’s Time to Make a New Beginning
Even though research and surveys indicate that by 2016 most of the banks will process transactions in cloud, unfortunately, as far as conceptualization and implementation of the technology is concerned, only a handful of banks like De Nederlandsche Bank and Bankinter have come forward to initiate a change. Invoking a major shift in paradigm, Dutch bank De Nederlandsche, which manages assets worth €8 billion, transferred its entire retail banking portfolio to the Amazon Web Services (AWS) cloud platform.
Why Banks should React now
Responding to significant cues from other industry verticals, the banking industry, which in recent times is experiencing a tremendous pressure to consolidate IT expenditures, is gradually opening itself up to the diversified mix of opportunities and convenience that cloud computing promises to offer. Apart from capitalizing on a range of services like mobile applications, retail banking platform, complex computing and credit risk analysis, here are some of the unique transformational benefits that the industry is looking forward to.
1. Cost Reduction
Not just the banking industry, cost curtailment in today’s business scene, is a top priority for every company, irrespective of its industry orientation. Cloud computing guarantees the technological advantage that helps bank cut costs and bring infrastructural expenses down to a considerable level. Meaning, the banks while in cloud won’t have to make large upfront investments in dedicated hardware, expensive software and related manpower. Most importantly, since the clouds operate on a pay-on-demand model, the banks can update their IT infrastructure in the cloud and pay only for the hardware and software they require.
2. Flexibility and Scalability
Flexibility and Scalability are perhaps the two distinct features that makes cloud computing more appealing and lucrative. By adopting the technology, banks can quickly and effectively address issues like evolving markets, growing customer needs and rapid technological advancements. Offering the option to scale up and scale down technology as and when required, the cloud technology, which forms the basis of agile banking, provides a competitive edge by empowering banks the flexibility to respond efficiently to sudden changes in the business climate.
4. Improved Productivity
Cloud technology is designed to dispense increased efficiency and optimized operating leverage to the banks. With its inherently standardised approach, cloud computing widens the scope for banks to integrate new technologies with agility and not being saddled with overheads of managing heavily customized applications in the future.
4. Speedy Service
Compared to traditional deployment approach, the Cloud computing applications are innovative application that are fast and easy to launch, either on a stand-alone basis or in partnership with other applications.
5. Better insights into Client Relationships
Needless to mention, in today’s world, sustainable client bonding is critical to success in every industry. Cloud technology, by opening up the opportunity to unlimited computing, make it easier to combine with big data, which in turn help banks come up with unique systems that deliver improved and customized services for their clients.
To sum it up, the cloud computing is a transformational idea in itself and promises to deliver innovation, growth, agility and diversity for the banking industry.
Author: Kishore Kapoor
Kishore Kapoor an industry veteran of 31 years in global banking technology. A Founder & CEO of eKutumb.com – World’s first marketplace for enterprise software delivery and consulting business by creating value for all of industry stakeholders involved (customers, partners, individuals and investors) through a disruptive and trans-formative approach of doing business.