Why Financial Institutions Need A Cloud Strategy !

The need for the financial sector to execute cloud services into their system largely depends on improving customer expectations and increasing efficiency. We can see this from the world bank reports that show its cut down on management costs by $8 million.

Viewing this from the customers' perspective, there is a continuous and accessible expectation for better user experience, which in the long run, boosts revenue generation. We at Growth Jockey recognises the benefits your business can gain from moving to the cloud.

From increased scalability and flexibility to high efficiency, this article highlights some reasons financial institutions need to pick up the pace.

Cloud Computing in the Financial Sector

Cloud computing is a top-demand service that offers access to shared applications, resources, and internet storage. It allows financial institutions to process and store data in remote servers rather than local systems.

While the traditional finance system is rigidly managed, technological innovations have uncovered new approaches in financial services with lesser restrictions and reduced entry costs.

For instance, the Decentralized fiance (DeFi) is a strong financial market backed up by blockchain that depends on the cloud with no middle party. Apart from the befit of legislation that cloud service models provide, there is a solution to storing a large number of data generated daily.

Statista further proves this point in its research, which reveals that above 79 data zettabytes were produced by 2021, and only 10% of it was new. This prediction simply highlights the possibility that financial institutions will likely produce double the data by 2025. Ultimately, it emphasises the need for the banking sectors to migrate to the cloud to handle such mass data volume properly.

The introduction of cloud computing to the banking sector provides many benefits, like quicker processing speed, improved security, and lower expenses. Despite the benefits, there is a noticeable slack in the financial sectors to take up cloud migration because of data privacy problems.

As rational as the challenges are, more banks are slowly migrating because of the more significant pros of simultaneously meeting their goals while satisfying their client’s needs.

Benefits of Cloud Computing Strategies in Financial Institutions

More financial institutions are likely to increase the move over to cloud service models once they fully grasp the benefits it offers. Some of them include the following:

1. Flexibility and Scalability

Cloud computing strategies remove problems from properly storing and managing data for financial sectors. Its utilisation in banking means explicitly easier and faster access to various data for risk mitigation, regulatory reports, and observing risk control anomalies. Furthermore, it gives these institutions a step forward in deep learning and analytics. In practical terms, cloud computing can create customised interactions between customers and tellers, running without first-hand linkage to a regular data centre.

2. Reduced Costs

Among the various cloud computing benefits, what stands out most is the provision for financial institutions to reduce operative costs. The cloud’s selective system makes it easy for these firms to get what they need to operate while avoiding the charging cost of unneeded features.

Banks get to save funds by migrating their data and applications to the cloud as they harness their efficiency. At Growth Jockey, we believe in the productivity that comes from saving costs. This is why we connect your business to the right resources to increase growth.

3. DevOps Effectiveness

Fintech that integrates cloud services can swiftly unveil new product iterations and ideas for quicker tests and implementation. The cloud service models enable simultaneous environment equipping and compliance monitoring, improving risk management.

Firms can now test their solutions and easily adjust for optimum implementation.

4. Open Banking

Since we are talking about managing large financial data processing, open banking comes into play. This is when clients give access to authorised third parties to manage their financial details through an API.

These third parties provide personalised financial services to the customer in return. This feature alone is singlehandedly revolutionalising the banking sector. However, it needs a platform to process the large data volume.

Cloud computing does the trick by providing seamless platforms to store and utilise these data while improving efficiency.

5. Improved Security

By moving to the cloud, financial institutions can achieve a secure platform compared to local storage systems. This is because it provides various protection layers against data breaches among numerous attacks.

6. Enhanced Customer Experience

When it comes to the issue of customer success, the experience improves when using cloud platforms. Some of the improved experiences include virtual tellers and facial recognition features. All these are set in place to offer accurate information to each user automatically.

Cloud Solution Strategies for Financial Institutions

Cloud computing solutions can be broadly grouped into three categories, namely:

1. Infrastructure as a Service (IaaS)

Infrastructure as a service is a type of cloud computing that offers virtual-based computing resources via the internet. In the IaaS platform, the cloud manager provides IT infrastructure like networking, server, and storage resources.

It further delivers these resources to subscribing organisations through virtual machines attainable via the internet. IaaS benefits financial institutions by making their workload flexible, cost-effective, faster, and easier.

2. Software as a Service

Software as a service (SaaS) delivers apps through the internet- as services. Rather than maintaining and installing software, financial institutions access the services through the internet. This ultimately relieves them from the complexity of hardware and software management.

SaaS apps are also referred to as Web-based software, hosted software, or on-demand software. The various identification categories all serve the same function of managing application access, including availability, security, and performance for the institutions.

Let’s see the instance of a bank that has the responsibility of protecting its customer’s privacy while offering a secure and reliable service. The SaaS computing platform enables them to provide the same financial technology and systems without risking external access to this personal information.

At Growth Jockey, we offer SaaS provisions for businesses while taking the hassle of application complications from them.

3. Platform as a Service(PaaS)

Platform-as-a-Service refers to a cloud computing service model that offers financial institutions a full cloud platform, such as software, hardware, and infrastructure. The institutions use these services to develop, run, and manage applications while avoiding the complexity, cost, and inflexibility of maintaining on-site platforms.

The PaaS manager provides all the networks, servers, operating system software, and servers for the subscribers. It also provides development tools and databases at the data centres.

Banking institutions can pay fixed rates to proffer specific resources to users, or they opt for the pay-as-you-go pricing system. Both options enable financial institutions to test, build, run, deploy, update, and scale their applications quickly and less expensively.

The service ultimately saves them from costs they would have implored if they did it on their on-site platforms.

Challenges that Accompany Cloud Computing in Financial Institutions

As limitless as cloud computing benefits seem to the financial sector, there are impeding challenges that pose a worry to these sectors. Some of them include the following:

1. Compliance Issues

Banks and financial intuitions face a roadblock of complex compliance formalities when handling customer data. These cloud requirements pose difficulty when accessing information from their hosted data.

2. Cybersecurity Challenges

As much as all industries need to protect their data from cyber criminals, the financial sector’s need for this is of top priority. Cloud computing strategies are susceptible to external attacks, placing sensitive customers and company data at risk.

This problem seemingly limits these financial institutions from jumping to the saving nets of cloud service models.

3. Issue of Control

Most banking institutions fear losing some controlled degree over their platforms if they move them to the cloud.

As the issue of cloud storage gradually becomes the norm for banking and financial institutions, the need for cloud financial management arises.

This management enables institutions to cut down cloud costs and improve operational resilience, business agility, and employee productivity.

Conclusion

The need for financial institutions to incorporate cloud computing strategies is increasing as technology advances. Proving this need is the fact that in 2021 alone, giant companies like IBM and Microsoft began implementing cloud strategies in their operations.

As extensive data rapidly increases, the pressure to provide optimum regulation intensifies, leaving competitive forces to play among the various institutions. We at Growth jockey consider the benefits of the cloud to various institutions and implement this in our efficient business operations. Cloud computing will ultimately determine which institutions better handle customer experience seamlessly as the number of highly literate clients rises.

At Growth Jockey, we are fully committed to providing tailored solutions that effectively tackle the crucial challenges in cloud and cyber security faced by our clients across diverse industries. Regardless of the size of your company, whether it's a small-scale enterprise or a large corporation, you can now leverage the advantages of advanced technologies in cloud and cyber security.

Take the decisive step towards unlocking the next level of growth and protecting your brand by contacting us today!