In the days of cryptocurrency and Apple Pay, many people are more and more comfortable with the intersection of currency and the digital world. Financial institutions are in this transition period, too. It can be nerve-wracking to think about changing how data flows in an organization in which trust and security are paramount. But, don’t think about pivoting to the bank vault business yet. Financial services can benefit from cloud computing in several ways.
Cloud computing can reduce the amount of DevOps work that needs to be done within the company, save money after an initial investment, improve reliability and speed, and help improve customer experience. Take a look at the benefits financial institutions see from it today along with some downsides—don’t think of the cloud as a patch that can solve all problems.
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- Cost savings
- Better speed
- Customer experience
- Scalable, continuous operations
- Outsourcing DevOps and modernization
At best, the greater efficiency that comes with cloud computing can bring cost savings, too. Keri Smith of Accenture’s Applied Intelligence practice for financial services found several major reasons why moving to the cloud can lead to cost savings. Running data in the cloud can reach cost savings of up to 65%, although the average is around 20%, she said.
Plus, scaling the amount of space you need on the cloud up and down ensures you’re only paying for what you use. Further, moving core functions to the cloud instead of maintaining mainframes on-premises can remove the expense of the mainframe itself. That isn’t guaranteed, though: Take a look at your setup and see if that 20% makes sense for you.
Accenture also found that moving to the cloud came with greater speed, and that doesn’t just mean the amount of time it takes to retrieve data from a spreadsheet. Its recent report found it brought “higher digital fluency across the organization, increased worker productivity and lower costs for training and development.”
However, be careful to balance this against some processes that might slow down as employees get used to working with new methods and applications. Digital fluency takes time itself, and the cost and time this takes might need to be factored into a move to the cloud.
However, the intersection between digital speed and the time it takes for humans to catch up is complicated. Working on the cloud may mean it takes less time to train machine learning models. HSBC with Google Cloud changed this from taking one week to taking just one hour. But, automation does not make up for poor call center training or other bottlenecks in making sure the system works for real people.
Speaking of customers calling in, customer experience can be very different with the cloud. Deltec Bank found that adding edge computing with the cloud to its financial services offerings can enable more customized experiences, such as facial recognition or virtual tellers who provide relevant information to each individual customer automatically.
Stephen Fabel, director of Canonical and creator of Ubuntu, specifies that robotic computer vision or machine learning can enable this sort of experience in bank branches. This might also tie into the idea of bring-your-own-device banking that moves data closer to the customer than today’s mobile offerings.
Scalable, continuous operations
Deltec Bank also predicts that with more personalized operations, the cloud will bring continuous business and scalable operations. Personalized interactions between tellers and customers will be able to run without direct connection to a traditional data center.
Computer vision could help a bank operate even if employees are not available. This will also reduce the weight put on on-site digital assets.
When it comes to scaling, more and more organizations are putting more weight on the cloud. Gartner says three-quarters of enterprise-generated data will be created and processed at the edge by 2025. A cloud provider will be able to recommend a plan for the stage of the cloud journey each organization is in.
Looking at scale will also tell you whether your organization might not be large enough or moving in an appropriate direction to make connecting with a cloud services provider cost-effective. For banking and other financial services, that might include taking into account how to weather an economic downturn while providing exactly what your customers want to do with their money in an uncertain time. Consider how and whether modernization will be a good decision for your financial institution overall.
Outsourcing DevOps and modernization
PwC points out that some of the modernization that comes with the cloud is in fact just another case of finding the right experts among mere humans. Its cloud solution allows organizations to outsource technical specialization for cloud, mainframe and modernization. Its services are built with financial institutions in mind, so the people behind them will have industry-specific expertise and ideas, too.
Assisted modernization can ensure a smooth transition from legacy systems to a cloud-first model. Just as financial cloud services enable customers to have more personalized services, so too does a good cloud service provider know how to customize its offerings to the kind of legacy systems an organization has. The speed of modernization and which systems get upgraded when, and for what reasons, will differ between them.
Trying to decide what kind of cloud services are right for your financial services organization? Take a look at more financial services software, IBM Cloud for Financial Services or Banking as a Service.