Top 6 ways the cloud enables security and new opportunities for financial institutions
Financial institutions that are reluctant to change are bowing to increasing pressure to offer personalized (digital-first) services demanded by their customers. It's also an effective response to the threat posed by FinTech startups.
Banks and financial services firms had to overhaul their digital infrastructure to deliver seamlessly immersive and interactive experiences. This means moving away from legacy systems to a cloud-native approach to power automation and more.
The cloud is central to digital transformation, so companies that failed to adopt cloud-based architectures risk falling behind and losing customers.
Britain's Lloyds Bank, for example, is accelerating its digital journey with the help of technology giants like Google and Microsoft. In this scenario, Lloyds engaged these partners to build digital banking tools to help them compete with a rising number of online-only FinTech firms and challenger banks.
At present, about 2.4 billion consumers access digital banking services. That number is expected to continue to rise over the next four years, so the race is on.
Let’s take a look at the top six ways the cloud enables security and new opportunities for banks and financial institutions.
1. Build resilient operations
The first step is to improve the firm’s resilience to respond rapidly to disruption, physical outages, and the consumers’ changing needs. To achieve this, financial institutions must move out of a single data center and securely replicate data and app services across data centers.
It also provides a perfect opportunity to update all internal operations to fortify the core for the next wave of disruption. This helps banks and capital market firms become more transparent, open, intelligent, secure, and deeply integrated into the lives of consumers.
2. Deploy multilayer security
Cloud services providers have extreme protocols to ensure robust security standards. They also have a track record to consider before making a commitment.
Cloud banking environments, for example, are often more secure than on-premise sites. When implemented correctly by highly skilled and trained security professionals, you’re on your way to building a strong security posture.
However, maintaining security consistently demands a multi-pronged approach. So make sure that your cloud services provider deploys security protocols like zero trust and robust encryption.
It’s critical, as research suggests that 23% of traditional banks had at least one misconfigured database that was potentially leaking data over the internet. Furthermore, 31% of banks had at least one Remote Code Execution vulnerability on-premise.
3. Synchronize enterprise data
Financial institutions generate oceans of data in real-time. To derive real value, they need to achieve better integration to enable smart decisions and deliver enhanced customer experiences.
By building common and connected data sets, banks and FinTech firms can access deeper and more sophisticated analytics and insights. This approach helps boost collaboration across departments and creates opportunities to develop new shared platforms and tools to enhance efficiency and productivity.
4. Serve customers faster
The cloud makes it easier for enterprises to develop new products and services quickly. As a result, the financial services industry can now meet the ever-changing requirements of their customer base.
Before the cloud, applications took over a year to reach the prototype stage and progress to the market. However, now with the cloud, Payment Services Directive, and Open Banking, it’s possible to be fast and customer-centric.
Cloud architecture allows developers to deploy new features in a matter of weeks or months. This is crucial for both traditional financial institutions and challenger banks that fight to remain relevant. When your customers are happy, it also helps forge strong, lasting relationships.
5. Drive business innovation
One of the main reasons for adopting the cloud is to drive business innovation. When you have all operations and real-time data at your fingertips, you’re well-placed to build new customer experiences. Furthermore, you can optimize processes and provide market offers based on real-time insights.
With a plethora of tools like artificial intelligence, machine learning, image recognition, natural language processing, augmented reality, virtual reality, Internet of Things platforms, and more, there are opportunities to cut costs, increase revenue, and make operations more consistent.
6. Better serve a new tech-savvy audience
Customers are increasingly tech-savvy. As Generation Z enters the workplace, employers will also be under pressure to retain a group of people that grew up with technology.
Aligning technology with your business unit needs helps better cater to your customer and employee demands. By leveraging approaches and frameworks like agile, DevOps, user experience, and more, financial institutions can also attract and retain new workers.
By taking advantage of automation and human augmentation, banks and financial services firms are now more productive. With firm integration, resulting in enhanced agility and transparency, they can also solve customer and business problems in record time.
If your financial institution is ready to take the leap up to the cloud, we can help. Request a commitment-free call back now!