“Banking is necessary, but banks are not,” observed Bill Gates way back in 1994. And while he also thought that 640 kilobytes should be enough memory for anybody, his views on banking could not be more relevant today, as the industry takes large leaps forward into the cloud. “Neo banks” are on the rise across the world, and according to Zion Industry Research, they’re on track to represent a USD 394.6 billion market by 2026. Innovation has been a priority for financial institutions, owing to the pervasive use of technology and digital transformation, and this has paved the way for banks to create in the cloud.
High interest in cloud banking
Cloud has allowed banks to reduce expenses, reduce speculative technology investments, and align costs with business success. Cloud infra also provides scalability, remote access, resilience, security, and disaster recovery benefits.
Banks have also found advantages in moving data linked to transactions, customers, and more to the cloud. Cloud tiering, for example, can help financial institutions conserve storage space and cut operating costs. Similarly, banks are implementing these technologies to improve risk management, market evaluation, and accounting.
Returns on Investment
With the tech we have available today, building a digital-first bank has never been easier. When a leading private bank with over 1,500 employees, and annual revenues of ~USD 1.6 billion took a strategic call to transition their workloads to the cloud from their on-prem data centre, one of their key asks was that the transition is seamless. The bank also needed a consistent data fabric to allow data to flow seamlessly between their storage resources. The challenges were met by replicating over 50TB of production WORM (Write Once, Ready Many) data to object storage from their on-prem storage arrays.
As a result, the transition to the cloud was quick, hassle-free, and securely conducted using an automated data synchronisation service. By tapping into the cloud for its core operations, the bank was able to automate maintenance, updates, as well as redesign their backup systems while having control over their security.
KYC (Know Your Customer)
With the cloud having proven its worth in addressing security and compliance needs, banks can now focus on their core mission of delivering a great customer experience. Today’s digitally-savvy customer expects timely and tailored services. Going forward, AI, data analytics, and machine learning will be essential to delivering this experience.
For many financial institutions, a cloud-driven strategy is still outside their comfort zones. However, with the pace of the market being as it is, it’s best they navigate their ways to the cloud before their competition does.
At the end of the day, a bank’s reputation is as good as their customer experience. Being able to adopt advanced technologies and deliver personalised financial services at a tap is what will define their success and pave the way for the adoption of new-age technologies like augmented reality and voice activation in the near future.