What Will Financial Services of the Future Look Like in the Cloud?

Cloud technologies are attracting more and more attention from IT entrepreneurs and top managers. What are the new opportunities that the cloud opens for companies?

In 10 years, banks and financial organizations will be different. In order to meet ever-changing consumer expectations, companies have to change rapidly as well. Key figures of the banking industry have started talking about cloud technologies more often.

The largest cloud providers supply banks with products that offer the following benefits:

• The opportunity to synchronize the work of different departments and teams.

• Aggregation of data on risk, finance, regulations, customer support, etc. in a single repository and the use of all this data for comprehensive analysis.

• Introduction of new models for boosting revenues, lowering costs, connecting to customers more effectively, speeding up new offerings, etc.

Optimization and new coverage

After a long investigation and consideration of the pros and cons, top managers have divided all possible use cases of the cloud into two categories:

• those facilitating business development and expansion into new markets;

• those facilitating optimization of the bank’s internal processes.

Each category includes three areas where the use of cloud technologies is expected to bring the maximum effect.

Business development and coverage expansion

In the top managers’ opinion, the introduction of cloud technologies in the following three areas will improve business efficiency:

1. Synchronization of the company. Cloud technologies allow different departments of the bank to quickly exchange information and make decisions. This will help to improve the quality of customer service. In addition, there will be the possibility to create shared data arrays, which will improve the quality of analytics and hence the work of the bank in general.

2. Implementation of innovations. The use of the cloud will allow for faster implementation and testing of AI, ML, IoT, AR, VR, and other technologies. The solutions that show the best results will be maintained.

3. Attraction of new talents. The emergence of new technologies in the bank makes it possible to attract and effectively use the resources of such specialists as DevOps engineers, Scrum Masters, etc. This, in turn, helps to increase the productivity of other employees, optimize processes, etc.

Optimization of the enterprise 

Optimization of internal processes is possible with the introduction of cloud technologies to the following areas:

1. Improvement of the company’s steadiness. With the introduction of cloud technologies, the company will become more resilient to situations like power cuts, disruptions, etc. Relocation and changing offices will go more quickly and without problems.

2. Improvement of IT security. Cloud providers have solid experience in cybersecurity and thus ensure the highest possible cybersecurity measures. With the right organization of cloud services within the company, the working environment will probably be even more secure than with using local storage.

3. Flexible scaling. The bank can quickly change the amount of supported storage, if necessary. This allows optimizing costs or quickly increasing capacity

The transition to the cloud can be gradual, so banks can combine multi-cloud and hybrid solutions.

Planning and implementation of cloud solutions

Development of business scenario

The scenario should consider all the opportunities and benefits of adopting cloud technologies: increasing revenue, lowering costs, attracting talent, etc. At the same time, the cost of deploying a cloud program needs to be minimal. The scenario should also include a business case for the changes that will take place in the organization.

Solution development and execution

The cost and schedule of the technology launch are key factors for the company. Moving to the cloud takes time, but later, the company will have the opportunity to use ML, Deep Learning, and other technologies that accelerate the launch of the final product.

Relationship with solution providers

It is recommended to avoid being tied to a single cloud provider for several reasons:

1. Offerings from suppliers are constantly changing.

2. When switching to hybrid and multi-cloud environments, the company’s needs change.

3. The forced transition from a supplier the company was attached to will be difficult.

4. Working with several suppliers allows for choosing the best deals.

Security

Cybersecurity is one of the key issues for the bank’s managers. Another important issue when deciding whether to move to the cloud is the estimation of the current level of security and the level that is expected after the transition to the cloud. The level of security may differ depending on the tools that the provider uses.

Compliance with regulations

Working in the cloud makes it easy to create a variety of documents and reports that meet the regulatory requirements of different countries. This is convenient for banks that regularly conduct cross-border transactions. It also simplifies internal reporting, as well as tracking of money laundering and other financial crimes.

Prospects for the development of cloud technologies in banking

Over the past 3-5 years, most companies that work with data have taken some steps toward the cloud. The speed of transition to the cloud largely depends on the involvement of the CTO/IT Director, who is the main driving force in this direction.

An estimate of the volume of investments in cloud technologies suggests that, in the coming years, the cloud will become a market maker of the technology industry. As for the financial sphere, companies are actively using private, public, and hybrid cloud solutions to create innovative products and services.