The cloud is transforming the way organisations of all sizes and across different sectors do business, and the financial sector is also being impacted by it. However, many companies avoided this technology when it first emerged for different reasons and continued their use of legacy systems. However, cloud technology has improved greatly over the years to offer a range of benefits to financial services institutions. Here are 5 benefits of the cloud for the financial sector.
Enables to serve customers faster
One of the prominent advantages of the cloud is that it allows financial institutions to develop and launch new products and services quickly and easily. Before the advent of the cloud, financial institutions were slow to respond to the feedback from customers because the needed applications took as long as 18-24 months to develop, before being launched to the market.
With the cloud, the speed of app development and deployment has greatly improved, therefore enabling financial institutions to quickly respond to the requirements of their customers. The entire process from development to launch can now be completed in less than 3 months, so both challenger banks and established institutions can stay competitive in the industry and keep pace with the digital banking age.
If the recent upsurge in the number of data breach cases is anything to go by, it means we are living in an era where businesses are increasingly at risk of malicious attacks than ever before. Running on-premise IT infrastructure exposes financial organisations to the risk of cyberattacks as something as simple as a phishing email attack, albeit in a sophisticated manner, can bring down the entire network.
However, financial institutions can breathe easy, knowing that they have transferred the burden of protecting their systems and sensitive data to their cloud provider. The providers comply with a variety of international security standards and employ the best of breed IT professionals to combat the myriad of cyber threats. This helps them to be compliant with regulations like the GDPR and other retention policies. Additionally, data backup is carried out to multiple servers and even across different regions, to aid disaster recovery.
The financial sector is a very competitive one, and financial institutions constantly look for ways to streamline their operations to enjoy improved efficiency. One of the ways that moving to the cloud helps to increase efficiency is that it frees up the time of IT staff. Rather than focus on mundane activities, they can focus on value-adding tasks such as working on other IT projects that have been in the backlog.
Another way that the cloud boosts efficiency is that it enhances collaboration and communication between branches of the financial institutions in different countries since work can be done from anywhere in the world and on any device. In addition, the cloud reduces the risk of the usual downtime associated with on-site infrastructure due to tech issues, so business activities never have to grind to halt.
Helps to cut costs
One of the biggest challenges that organisations in the financial sector have faced over the years is the costs associated with building, developing and operating on-site IT infrastructure. IT budgets typically include expenditure for hardware purchases, cooling, power, space and recruitment as well as training of staff.
Migrating to the cloud allows financial institutions to avoid unnecessary capital expenditure as well as large upfront costs related to building infrastructure. In other words, the cloud eliminates the need for heavy investment in dedicated hardware, software and manpower. Instead, the money can be channelled into other aspects of running the business.
The cloud solves one problem that financial institutions have struggled with for decades – the problem of scalability. It offers solutions that allow organisations to evolve and adapt as their needs and goals change without the huge investment of money or time. In essence, they can get access to the resources they need in a matter of minutes or hours without any disruptions to their service. Financial companies can scale up or down rapidly according to the needs of the company, which is critical to remaining competitive.
With the misconceptions about perceived security concerns and the benefits that cloud offers dispelled, many organisations in the financial sector are moving their systems to the cloud. Migrating to the cloud has proven to be a smart move, as it helps companies ease their operations and function more efficiently.