Banks have traditionally relied on legacy systems and are often hesitant to make changes to their technology infrastructure. However, as misconceptions about perceived security concerns are dispelled, an increasing number are considering moving to the cloud.
Although intimidating, this move promises significant benefits to banks and will assist them in overcoming the challenges they have faced with legacy systems in the past.
According to a recent survey conducted by the fintech firm Fraedom, 46 percent of bankers see these trials as the most significant impediment to commercial bank growth.
What is Cloud Banking and how it works?
You might wonder what the thing that will make banking easier is? The answer is pretty simple. It’s Cloud Banking. The cloud controls a bank’s data storage and ensures 360-degree visibility over every transaction.
Banks make the most out of cloud computing by monitoring end-to-end processes. An additional benefit to Cloud Banking is that the banks will be soon notified if there is any security breach.
Cloud computing is becoming a top priority for IT leaders, C-suite executives, and board members. Learning how the cloud can be a catalyst for enterprise business transformation, as well as a potential game-changer for how financial services organizations will operate in the future.
Cloud computing is something that many engineers have been working on for a long time, and it has a promising future. It provides different services with the help of the internet. And in today’s world, the Internet is of utmost importance. The services that we can use are:- data storage, servers, databases, networking, and software.
Now instead of Cloud Computing, think about Cloud banking. It’s almost similar; the only thing that adds up is the fact that we will be using Clouds for every banking procedure. Be it storing data, saving transactions, money laundering alerts, or something else. Similarly, there are some specific challenges that cloud banking can easily resolve. (Source)
Key Challenges Resolved by Cloud Banking
This includes acquiring new customers while keeping current customers satisfied, ensuring that your customers seek and use all of the bank's services, and providing them with stellar service to keep them from switching to a competitor.
Quickly bringing assistance to commercialize:
New services and offers are released on a regular basis; keeping up with these offers and ensuring all your collaterals are updated on time necessitates the use of a solution that allows you to deploy to market quickly and easily.
Innovation that is flexible:
The need to meet your customers where they are and to consistently reinvent your offerings to appeal to the current market situation forces banks to be on their feet and reinvent themselves on a regular basis. This necessitates the use of an adaptable model.
This entails staying up to date on all regulatory mandates and ensuring that everyone is in accordance with the most current policies.
Financial institutions are constantly looking for ways to improve their data security and reduce the risk of cyber hacks.
Advantages of Cloud Banking in India
We are in the 21st century and also in the Industry Revolution 4.0. And India is one of the countries to revolutionize banking transactions, cloud computing plays a big role here.
On a daily basis, we come across digital banking. Whether recharging our phone, paying bills, or even shopping online. Right?
Now the question is, do you want a safer transaction method, or are you just going to go on with how things are with no guarantee of safety? Hence, the best thing that technology can give us is Cloud Banking. So, here are the advantages:-
Better Customer Insight
Improved Customer Insights Customer data contains insights that can only be discovered through advanced analytics.
Real-time data analysis can lay the groundwork for a level of hyper-personalization and proactive engagement across all channels that would otherwise be impossible with legacy infrastructure.
A bank or credit union can understand individual customer behavior and trigger ideal actions that drive conversion, engagement, and loyalty with instant analysis. Transaction banking simplifies payments between buyers and sellers.
Currently, the operations required to handle payments are fundamentally inefficient due to the usage of disparate technologies. Buyers and sellers, on the other hand, might be brought together through cloud-based shared applications. Cloud Computing can enhance Customer Experience more precisely.
Many financial institutions struggle to streamline, automate, and connect back-office processes that influence customer experiences.
Cloud technology has the potential to bring together disparate data and operational systems that have previously existed in silos and hampered efficiency. This can redirect time spent looking for insights to more productive and impactful analysis and decision making.
Reduction in Risks
What was once thought to be a shortcoming of cloud technology has now become one of its most incredible benefits. Cloud service providers offer a feasible alternative to out-of-date technologies that are becoming increasingly sensitive to data leakage.
Cloud-based solutions can give enhanced security by allowing for the quick discovery of potential breaches and embedding protection to ensure banking data. Cloud technologies can provide a high level of availability and redundancy that can assist with disaster response.
Innovation at its best
Cloud technology has the potential to shorten product deployment cycles and simplify product testing, allowing financial institutions to test innovations in real-time and respond swiftly to market approval (or rejection).
Cloud solutions also enable open banking, broadening the solution set available to consumers across traditional and non-traditional financial services.
Cloud technology enables firms to respond rapidly to changing market conditions, employing data and applied analytics to create a customer experience and operational productivity benefits for banks and credit unions seeking more business agility.
The potential range from adapting to changing consumer or competition dynamics to enabling the scalability of technology use.
According to the Fintech Futures, cloud computing eliminates the need for banks to invest considerably in dedicated hardware, software, and related people, they can update their IT infrastructure considerably more efficiently, and the cloud's modular, pay-on-demand architecture ensures they only pay for the gear and software they require.
What is the Future of Cloud Banking?
The cloud provides an opportunity, unlike any previous system, with cloud operators offering a variety of cloud services. The banking industry's infrastructure transition will only be accelerated, and the future of banking will be paved with a hyper-personalized and automated path.
Do you think after 10 years, the computational revolution will be the same as now? With constantly changing consumer expectations, and new technology every day, it is essential even for the banks to amp up their working procedure to be more technology-oriented.
Moreover, banking and Market leaders disclosed that the cloud is more than just technology. After years of working on this same technology, we can say that the technology is much more reliable and faster. So, in another decade, our future holds a lot of innovations just over cloud technology, and one of them is Cloud Banking.
Check out How Yes Bank is using Cloud Computing.
By removing some of the technological hurdles that banks encounter with their own infrastructure and technology, cloud banking fulfills expanding demands and evolving consumer expectations.
The banking cloud also enables banks to acquire on-demand access to extra servers and computing power, allowing them to focus on quick scalability when the institution encounters unanticipated high-volume activities.
The capacity to immediately turn on and off access to various computer resources boosts an institution's ability to undertake rapid testing and explore new product development projects, both of which have the potential to generate financial innovation.
After all, if a new development project fails, banks can simply withdraw their allocated on-demand assets and move on. And don’t you think this can completely change the world of Finance? So consider having the best cloud storage for every bank transaction you have on your company and you’ll know why cloud banking is necessary.
(Also read: Best cloud-computing platforms)