Connect with us

Banking

WHY BANKS ARE LOOKING TO THE HYBRID CLOUD FOR THEIR SILVER LINING

Published

on

George Wright

By George Wright, CEO, Smart Communications

A new generation of millennial customers, increased workforce mobility, and on-going digitalization are transforming the role of customer communications in the financial services industry.

George Wright

George Wright

A one-size-fits-all approach to customer communications does not work in today’s omnichannel world. Financial services companies are increasingly looking to harness Customer Communications Management (CCM) to deliver relevant, personalized interactions with customers, based on their individual needs, through multiple digital channels. The emergence of mobile technology and social networks means companies have to master an ever-growing volume of new communications channels – with 63% of millennials already accessing their bank accounts via a smartphone. Even though Which? reports the bigger banks are enhancing their mobile and online service offering, there is still room for improvement if they want to deliver relevant messaging via the customer’s communications channel of choice.

As CCM evolves, the industry is keen to reap the benefits of cloud-based software-as-a-service (SaaS) models. SaaS applications provide immediate value to financial companies as they are generally much faster to roll out than on-premises solutions, highly scalable – enabling the management of multiple customers at once, and provide constantly evolving software.A recent survey commissioned by Smart Communications in conjunction with Celent Research,assessed the current adoption of cloud-based CCM systems by businesses within financial services including banks, insurers, wealth managers, and pension funds.

So what is driving movement of financial services companies towards cloud-based CCM models and how will this trend develop?

Benefits of cloud-based CCM

There are a number of factors motivating financial services companies to deploy their CCM systems in the cloud. The first is the need to rationalize legacy correspondence systems, which do not benefit the business user and can hinder the provision of a personalized customer experience. The second factor relates to the commercial model, as cloud-based systems provide companies with the opportunity to convert fixed infrastructure costs to variable costs, and to adopt a usage-based licensing model.

Finally a cloud-based system is generally quicker to implement than on-premises solutions,as well as more flexible and agile than on-premise deployments, allowing companies to scale up resources and add functionality as and when it is necessary. Financial services companies are now looking to solutions that can support faster development of innovative products while bringing in new functionalities to support digitalization while lowering operational costs.

Enhanced mobile channels will be a key focus for developing CCM solutions in the short term, with almost three quarters (73%) of survey respondents expecting an increased emphasis on mobile for improving customer communications.Additional requirements in the near future may include customer journey analysis, integration with marketing campaign systems, the functionality to produce truly interactive documents, and the ability to leverage real-time communication tools such as social media and instant messaging. All these will need to be easily integrated into systems to support the evolution of CCM in an increasingly customer-centric world.

Evidence of a wider cloud strategy

Financial services companies already use full cloud SaaS in many areas of their business outside of core customer communications. Nearly a quarter (23%) of companies surveyed use SaaS systems for marketing campaign generation, and almost half (49%) report this as their preferred option. Although the survey looked largely at the use of CCM systems, it also revealed almost a third of respondents already intend to apply outsourced models to a majority of their CRM, HR, and ERP systems, providing evidence of a wider cloud strategy.

The application of cloud-based models is still relatively low for activities such as complex ad hoc document generation, with only 4% already using SaaS solutions for this purpose. This indicates companies need further education about the benefits of switching to full cloud SaaS in operational systems such as customer communications. When it comes to placing CCM fully in the cloud, concerns about data confidentiality are the most prevalent with 93% of respondents citing this as a high to very high concern. However, the report demonstrates there is clear evidence of movement towards cloud-based models across the financial services industry, which will only become more widespread,as previous fears are addressed and allayed. 

The hybrid cloud as a stepping-stone

There is one deployment model that is increasingly favored by financial services companies as it mitigates some of their key concerns. This model is the hybrid cloud, and almost 40% of respondents cited it as their preferred option when replacing their legacy, on-premises solutions. The hybrid cloud is a variant of a SaaS model where customer data stays securely inside the bank or insurer’s firewall during the document creation process, but is combined with cloud-based template design and content management. The hybrid cloud presents an ideal stepping-stone for the financial services industry as a solution that sits between traditional on-premise deployment and the full cloud approach.It enables companies to enjoy the many benefits of a cloud-based SaaS model while reassuring those who may be hesitant about moving to a full cloud solution.

 Like most verticals, the majority of systems within the financial services industry are shifting towards the cloud. And as communication within the industry continues to evolve and be impacted by changing customer preferences– with a growing emphasis on effective, real-time interactions and personalised messaging – the hybrid cloud will become the deployment model of choice as a bridge to full cloud adoption. The hybrid cloud provides the flexibility and commercial advantage of a cloud-based SaaS model while also guaranteeing data confidentiality and network security, providing banks, insurers and other financial services with that much sought-after silver lining.

Click here to download a complimentary copy of the Celent Research report.

Banking

ECB stays put but warns about surge in infections

Published

on

ECB stays put but warns about surge in infections 1

By Balazs Koranyi and Francesco Canepa

FRANKFURT (Reuters) – The European Central Bank warned on Thursday that a new surge in COVID-19 infections poses risks to the euro zone’s recovery and reaffirmed its pledge to keep borrowing costs low to help the economy through the pandemic.

Having extended stimulus well into next year with a massive support package in December, ECB policymakers kept policy unchanged on Thursday, keen to let governments take over the task of keeping the euro zone economy afloat until normal business activity can resume.

But they warned about a new rise in infections and the ensuing restrictions to economic activity, saying they were prepared to provide even more support to the economy if needed.

“The renewed surge in coronavirus (COVID-19) infections and the restrictive and prolonged containment measures imposed in many euro area countries are disrupting economic activity,” ECB President Christine Lagarde said in her opening statement.

Fresh lockdowns, a slow start to vaccinations across the 19 countries that use the euro, and the currency’s strength will increase headwinds for exporters, challenging the ECB’s forecasts of a robust recovery starting in the second quarter.

Lagarde saluted the start of vaccinations as “an important milestone” despite “some difficulty” and said the latest data was still in line with the ECB’s forecasts.

She conceded that the strong euro, which hit a 2-1/2 year high against the dollar earlier this month, was putting a dampener on inflation and reaffirmed that the ECB would continue to monitor the exchange rate.

The euro has dropped 1% on a trade-weighted basis since the start of the year, but is up nearly 7% over the last 12 months. Against the U.S. dollar, that number rises to over 10%.

MORE STIMULUS?

Opening the door for more stimulus if needed, Lagarde confirmed the ECB would continue buying bonds until “it judges that the coronavirus crisis phase is over”.

Lagarde also kept a closely watched reference to “downside” risks facing the euro zone economy, which has been a reliable indicator that the ECB saw policy easing as more likely than tightening.

But she signalled those risks were less acute, in part thanks to the recent Brexit deal.

“The news about the prospects for the global economy, the agreement on future EU-UK relations and the start of vaccination campaigns is encouraging,” Lagarde said. “But the ongoing pandemic and its implications for economic and financial conditions continue to be sources of downside risk.”

Lagarde conceded that the immediate future was challenging but argued that should not impact the longer term.

“Once the impact of the pandemic fades, a recovery in demand, supported by accommodative fiscal and monetary policies, will put upward pressure on inflation over the medium term,” Lagarde said.

Benign market indicators support Lagarde’s argument. Stocks are rising, interest rates are steady and government borrowing costs are trending lower, despite some political drama in Italy.

There is also around 1 trillion euros of untapped funds in the Pandemic Emergency Purchase Programme (PEPP) to back up her pledge to keep borrowing costs at record lows.

The ECB has indicated it may not even need it to use it all.

“If favourable financing conditions can be maintained with asset purchase flows that do not exhaust the envelope over the net purchase horizon of the PEPP, the envelope need not be used in full,” Lagarde said.

Recent economic history also favours the ECB. When most of the economy reopened last summer, activity rebounded more quickly than expected, indicating that firms were more resilient than had been feared.

Uncomfortably low inflation is set to remain a thorn in the ECB’s side for years to come, however, even if surging oil demand helps put upward pressure on prices in 2021.

With Thursday’s decision, the ECB’s benchmark deposit rate remained at minus 0.5% while the overall quota for bond purchases under PEPP was maintained at 1.85 trillion euros.

(Editing by Catherine Evans)

Continue Reading

Banking

Bank of Japan lifts next year’s growth forecast, saves ammunition as virus risks linger

Published

on

Bank of Japan lifts next year's growth forecast, saves ammunition as virus risks linger 2

By Leika Kihara and Tetsushi Kajimoto

TOKYO (Reuters) – The Bank of Japan kept monetary policy steady on Thursday and upgraded its economic forecast for next fiscal year, but warned of escalating risks to the outlook as new coronavirus emergency measures threatened to derail a fragile recovery.

BOJ Governor Haruhiko Kuroda said the board also discussed the bank’s review of its policy tools due in March, though dropped few hints on what the outcome could be.

“Our review won’t focus just on addressing the side-effects of our policy. We need to make it more effective and agile,” Kuroda told a news conference.

As widely expected, the BOJ maintained its targets under yield curve control (YCC) at -0.1% for short-term interest rates and around 0% for 10-year bond yields.

In fresh quarterly projections, the BOJ upgraded next fiscal year’s growth forecast to a 3.9% expansion from a 3.6% gain seen three months ago based on hopes the government’s huge spending package will soften the blow from the pandemic.

But it offered a bleaker view on consumption, warning that services spending will remain under “strong downward pressure” due to fresh state of emergency measures taken this month.

“Japan’s economy is picking up as a trend,” the BOJ said in the report, offering a slightly more nuanced view than last month when it said growth was “picking up.”

While Kuroda reiterated the BOJ’s readiness to ramp up stimulus further, he voiced hope robust exports and expected roll-outs of vaccines will brighten prospects for a recovery.

“I don’t think the risk of Japan sliding back into deflation is high,” he said, signalling the BOJ has offered sufficient stimulus for now to ease the blow from COVID-19.

NO EXIT EYED

Many analysts had expected the BOJ to hold fire ahead of a policy review in March, which aims to make its tools sustainable as Japan braces for a prolonged battle with COVID-19.

Sources have told Reuters the BOJ will discuss ways to scale back its massive purchases of exchange-traded funds (ETF) and loosen its grip on YCC to breathe life back into markets numbed by years of heavy-handed intervention.

Kuroda said the BOJ may look at such options at the review, but stressed a decision will depend on the findings of its scrutiny into the effects and costs of YCC.

He also made clear any steps the BOJ would take will not lead to a withdrawal of stimulus.

“It’s too early to exit from our massive monetary easing programme at this point,” Kuroda said. “Western economies have been deploying monetary easing steps for a decade, and none of them are mulling an exit now.”

(Reporting by Leika Kihara and Tetsushi Kajimoto; additional reporting by Kaori Kaneko; Editing by Simon Cameron-Moore & Shri Navaratnam)

Continue Reading

Banking

World Bank, IMF agree to hold April meetings online due to COVID-19 risks

Published

on

World Bank, IMF agree to hold April meetings online due to COVID-19 risks 3

WASHINGTON (Reuters) – The International Monetary Fund and the World Bank have agreed to hold their spring meetings, planned for April 5-11, online instead of in person due to continued concerns about the coronavirus pandemic, they said in joint statement.

The meetings usually bring some 10,000 government officials, journalists, business people and civil society representatives from across the world to a tightly-packed two-block area of Washington that houses their headquarters.

This will be the third of the institutions’ semiannual meetings to be held virtually due to the pandemic.

(Reporting by Andrea Shalal; Editing by Chris Rees

Continue Reading
Editorial & Advertiser disclosureOur website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.

Call For Entries

Global Banking and Finance Review Awards Nominations 2021
2021 Awards now open. Click Here to Nominate

Latest Articles

The Beaconsoft story and introducing its one-of-a-kind digital campaign intelligence platform 4 The Beaconsoft story and introducing its one-of-a-kind digital campaign intelligence platform 5
Interviews2 days ago

The Beaconsoft story and introducing its one-of-a-kind digital campaign intelligence platform

By Nigel Bridges, founding CEO of Beaconsoft Limited What were you doing prior to setting up Beaconsoft? Before setting up...

Top 8 Tax Scams to Watch Out For 6 Top 8 Tax Scams to Watch Out For 7
Finance2 days ago

Top 8 Tax Scams to Watch Out For

It is tax time and that means finding the best way to file your taxes and to get a refund...

Hisham Itani and Resource Group Recognized in the 2020 Global Banking & Finance Awards® 8 Hisham Itani and Resource Group Recognized in the 2020 Global Banking & Finance Awards® 9
Technology2 days ago

Hisham Itani and Resource Group Recognized in the 2020 Global Banking & Finance Awards®

Global Banking & Finance Review has awarded Hisham Itani the Chairman and CEO of Resource Group, Technology CEO of the...

Euro zone business activity shrank in January as lockdowns hit services 10 Euro zone business activity shrank in January as lockdowns hit services 11
Business3 days ago

Euro zone business activity shrank in January as lockdowns hit services

By Jonathan Cable LONDON (Reuters) – Economic activity in the euro zone shrank markedly in January as lockdown restrictions to...

Volkswagen's profit halves, but deliveries recovering 12 Volkswagen's profit halves, but deliveries recovering 13
Business3 days ago

Volkswagen’s profit halves, but deliveries recovering

BERLIN (Reuters) – Volkswagen reported a nearly 50% drop in its 2020 adjusted operating profit on Friday but said car...

Global chip shortage hits China's bitcoin mining sector 14 Global chip shortage hits China's bitcoin mining sector 15
Business3 days ago

Global chip shortage hits China’s bitcoin mining sector

By Samuel Shen and Alun John SHANGHAI/HONG KONG (Reuters) – A global chip shortage is choking the production of machines...

Iran's oil exports rise 'significantly' despite sanctions, minister says 16 Iran's oil exports rise 'significantly' despite sanctions, minister says 17
Business3 days ago

Iran’s oil exports rise ‘significantly’ despite sanctions, minister says

DUBAI/LONDON (Reuters) – Iran’s oil exports have climbed in recent months and its sales of petroleum products to foreign buyers...

Nissan to source more UK batteries as part of Brexit deal 'opportunity' 18 Nissan to source more UK batteries as part of Brexit deal 'opportunity' 19
Business3 days ago

Nissan to source more UK batteries as part of Brexit deal ‘opportunity’

By Costas Pitas LONDON (Reuters) – Nissan will source more batteries from Britain to avoid tariffs on electric cars after...

Muted recovery for UK retailers in December ends worst year on record 20 Muted recovery for UK retailers in December ends worst year on record 21
Business3 days ago

Muted recovery for UK retailers in December ends worst year on record

By David Milliken and Andy Bruce LONDON (Reuters) – British retailers struggled to recover in December from a partial coronavirus...

Chinese phone maker Honor partners with key chip suppliers after Huawei split 22 Chinese phone maker Honor partners with key chip suppliers after Huawei split 23
Business3 days ago

Chinese phone maker Honor partners with key chip suppliers after Huawei split

By David Kirton SHENZHEN, China (Reuters) – Chinese budget phone maker Honor said on Friday it had signed partnerships with...

Newsletters with Secrets & Analysis. Subscribe Now