By Walter Heck, CTO, HeleCloud
Throughout the pandemic, Cloud solutions have enabled many industries to continue operating seamlessly from home. Moving business applications to the Cloud and making services digitally accessible has been vital for business continuity as employees adapted to working from home. Indeed, a study found that 59 percent of executives have increased the pace of digital transformation over the last 12 months, and there’s no sign of this trend slowing down in 2021.
Despite this, a State of Database Monitoring report has also revealed that key players in the financial services industry are using outdated and unsecured third-party solutions to store and monitor their data, putting confidential business and client information at risk. In the wake of Covid-19, Financial Services firms (FS) are now rapidly migrating to the Cloud, enticed by its multiple monetary, innovation and performance benefits.
Why choose a hybrid solution
A Nutanix Enterprise Cloud Index Report found that the adoption rate of hybrid cloud solutions among financial service organisations increased by 21% in the Q1 of 2020, with an astonishing 89% of banks reporting that they are currently operating with or planning to operate with a hybrid cloud solution. Many FS firms turn to hybrid cloud as it enables them to gain insights into customer behaviour, product efficiency, cross-selling and upselling opportunities.
With hybrid cloud, companies can reduce their operating cost and enhance their data security simultaneously by splitting their data between on-premises storage for sensitive data, and cloud storage for less sensitive data. This helps FS firms adhere to changing regulatory reporting requirements in multiple operating jurisdictions. In turn, these solutions help FS firms conduct liquidity and risk calculations and monitor data to detect fraudulent activity. Ultimately, by using hybrid cloud, financial service organisations can maintain and support their legacy systems while simultaneously taking advantage of Cloud technology.
Can you remember the last time you physically visited a bank instead of online banking? Customers no longer have the time for physical bank visits, and the pandemic has only accelerated this need. As we continue to work from home, there is an even greater importance being placed on ‘digital convenience’.
The rise of cloud solutions is transforming the way financial organisations interact with their customers and navigate an extremely competitive and saturated landscape. A Barclaycard Payments report revealed that online transactions have skyrocketed during the pandemic, with online transactions making up 50% of all transactions over the last 12 months. FS firms have now entered an age where it is crucial for them to embrace new cloud technologies, to remain at the forefront of today’s digital revolution.
Financial institutions (FI) that imbed automation into their processes, will improve their core operations by reducing manual work that takes up time, effort, and resources, as well as removing the chances of human error. Considering that humans tend to make mistakes, this is possibly the most important benefit of automation. By using cloud technology to automate repetitive tasks and facilitate team collaboration, FS firms can dedicate their expertise to the most complex and profitable tasks and improve the customer experience.
Another major benefit for FIs that deal with large amounts of money is that automation minimizes the chances of fraud. By imbedding automation into financial systems, most fraudulent activity can be detected easily, anti-money laundering programs work better, and banks can minimize the chances of credit card fraud. Automation also provides easy and safe storing of large amounts of historical data and customer information for extended periods. In addition, FIs have realised that they can report regulatory and legal requirements to the regulators more efficiently through automation. Only by adopting the Cloud, can financial service organisations fully realise the benefits of automation.
A recent Accenture report reveals that many financial service CEOs believe that summer 2020 would have run smoother if they had used public cloud. Before the pandemic, just 29% of financial services firms had 60% or more of their workforce operating from home at least once per week. In the wake of Covid-19, this increased to 69% of financial services employers expecting at least three-fifths of their workforce to work from home at least once per week.
For many businesses, this meant pivoting their operating models to facilitate secure work-from-home environments for employees, and for many this meant turning to cloud technology to keep internal operations running in the aftermath of pandemic-related office closures. Using the cloud to facilitate remote working enabled many businesses to continue serving customers even in the pandemic’s chaotic early days.
Cloud technology is often more cost-effective than physical infrastructure. Some cloud platforms allow for self-service, so customers can provision storage and launch applications without needing to route requests through an external service provider. The cloud is also an appealing way to store data and access advanced applications, such as those that rely upon artificial intelligence and machine learning (AI/ML). For many banks, cloud technology also helps IT teams to set up virtual call centres to field a deluge of calls from financially stressed customers. Chatbots fuelled by AI/ML, which often have hefty data storage and analysis needs, have also become more prevalent.
Finally, Cloud technology helps banks offer more nimble resources for people seeking government-backed loans. This is a prime example of how the cloud’s flexibility can empower financial institutions to process large numbers of transactions in a timely way, even when there are massive spikes in the volume of requests.
Making sense of the Cloud
A recent Accenture study reveals that cloud investment has grown significantly during the pandemic and predicts it will continue to expand at a rate of around 15% through 2022. Considering the pandemic, FIs already using the cloud for specific functions may scale up their digital transformation on a faster timeline than expected. In our current hyper-connected world, financial service institutions will need to change the way they interact with customers who are increasingly reliant upon digital services versus in-branch interactions.
Cloud Services Partners can help FS grow and scale their business. An experienced Cloud services partner is uniquely positioned to help guide financial institutions on their Cloud journey, accelerate digital transformation and ensure they receive all the automation, security, and scalability benefits they need to survive. With more and more key players moving processes and workflows onto the Cloud, it is up to each finance decision-maker to change now or risk falling behind.