Having a cloud-based platform is rapidly turning into the standard for IT modernization, especially in the finance and banking industries. At this point, cloud technology is already considered a critical tool and not just an emerging trend or futuristic concept. But while the importance of cloud computing has already been established in recent years, some banks are still reluctant to undergo transformative changes due to concerns around system downtimes, data security, regulatory compliance, and other perceived risks that are supposed to come with transferring the responsibility of critical processes to third-party providers.
In spite of all this, banks should remember that modernizing operations through cloud implementation is necessary to retain a competitive edge. By properly planning the integration of a cloud-based core banking system, banks can enjoy benefits that range from smoother workflow to reduced operational costs. Edging out the competition can be tough, but here are some ways that a cloud-based infrastructure can deliver banks a steady advantage.
Advantages of Cloud-Based Banking System
Allows Banks to Provide Customer-Centric Services
Customer-centricity means having the capacity to resolve customer concerns promptly and seamlessly. Banks should anticipate customer needs and be flexible enough to address such needs across disparate channels. Having a centralized cloud-based banking system allows banks to offer a full spectrum of financial services that would add value to customers’ lives. Moreover, customers will be able to access these services anytime, anywhere, and from almost any device.
Because cloud technology is modular, banks can also collaborate more efficiently on business processes. By eliminating data silos, banks no longer have to tolerate disjointed operations that hinder the process of addressing customer needs. Leveraging the cloud’s capacity to support artificial intelligence (AI) and machine learning (ML) helps banks automate operations and better manage staff productivity.
Customers are also more likely to associate good user experience with a banking platform based on the level of customer support they are getting. Banks can integrate intelligent systems into their banking platforms to ensure the consistent delivery of service. A customer service framework that involves a hybrid of human assistance and “smart” tools such as chatbots can better connect with users and ensure that they can get the support that they need.
Enables Banks to Gain Customer Insights to Improve Services
Banks must be aware of their customers’ habits, lifestyles, and concerns in order to make business decisions such as system upgrades and product rollouts. Through a cloud-based platform, banks can take advantage of tools such as AI and analytics to gather actionable information and generate valuable, data-rich insights to help inform their decisions.
Banks can also use such capabilities to deliver more customized experiences for users. Analytics-based reporting can take data at the granular level and present them in a way that will make decision-making easier. For example, banks can introduce in-app features such as budget trackers and loan application tools that are designed to analyze user-provided data. This can benefit banks when marketing to the younger generations, who are evidently more attuned to embedding technology into their daily lives.
Makes Security Compliance Easier
Having a cloud platform for core banking processes makes it possible for banks to comply with the latest digital and industry-specific security standards. Automated workload management, for instance, reduces the risks of human error and will also significantly prevent cases of theft and fraud.
While it’s true that security threats will never be totally eliminated, it must be noted that cloud service providers work to comprehensively study their offerings and continuously update them in line with strict, internationally recognized data security regulations. And because cloud platforms are tailored around data, it is safe to say that banks can fortify their long-term data security posture through a cloud-based banking platform. Choosing a reputable cloud provider allows banks to enjoy a compliant security framework that will help build the trust of consumers whose data they also need to protect.
Optimizes Costs for Upgrades and Operations
As a rule of thumb, institutions should avoid investing too much into on-premises systems that are notorious for high maintenance, storage management, and security upgrade costs. Relying too heavily on in-house infrastructure also burdens IT teams and puts their focus on tedious tasks rather than value-adding, innovative projects.
Opting for a subscription-based, software-as-a-service (SaaS) model allows banks to scale up or down and pay for only what they need. A cloud platform also has the capacity to continuously install updates that reflect automatically, reducing the weight of tasks under the IT department. This speeds up the time to market for new offerings and prevents staff from getting overburdened with integrating new features and capabilities.
Additionally, having a cloud-based system lightens disaster recovery tasks for IT teams. Cloud data is stored in geographically separated data centers with power redundancy precautions. This can ensure potential business continuity and minimal impact on operations during an emergency.
Cloud at the Core of Next-Level Banking
Banks should take a structured approach to modernization in order to keep delivering competitive services. Holding on to legacy in-house infrastructure can be costly and inflexible, hindering the financial institution’s potential to deliver better services that are more valuable to a modern client base. Cloud technology opens the door to greater agility, improved efficiency, better customer insights, and reduced risks of data and continuity breaches. But other than being a valuable tool for modernization, cloud technology is a future-proof way of keeping up and going beyond the ever-evolving competition.