• Ram Devanarayanan, Head of Business Consulting at Infosys Finacle Europe


• 25.09.2023 10:30 am
#cloud #Banking #FinancialIT

Modern banking is a far cry from the solid brick-and-mortar buildings first associated with the profession. Most dealings with banks today primarily happen online and through self-service channels, embedded in the everyday experiences of online customers. Customers expect more from these digital experiences, be it through the personalisation or contextualisation of interactions and services to improve their financial well-being. 

The increasing volumes of these digital transactions also mean that customer data is available to be analysed and used by banks and fintechs to enhance their offerings. Studies estimate that banks globally handle at least 1.9 petabytes of data daily but only use a mere 0.5 percent of that data for insight-driven engagements. 

However, there is a chance that a bank’s digital infrastructure will often be unable to handle and process data at this scale or transactions at peak levels. Adding to this, legacy systems function in silos and are expensive to maintain. A bank can hardly afford breakdowns or outages given the need to be up and running 24/7 for its customers.

A recent study by Quros and Infosys Finacle of over 650 bankers across the globe showed that only 30 percent of bankers have confidence in traditional banks to drive innovation in the digital era. This intensifies the pressure on incumbents to keep up with the challenges posed by neo banks nipping at their heels. To get ahead, banks need to put the foot down on innovation and upgrade rapidly. 

On the road to digital transformation, banks have found a critical enabler to success in the cloud. From enhancing operations and deepening customer engagement to accelerating innovation, the cloud has emerged as a game-changer, poised to assist banks in turbocharging their growth. 

We look at some of the many possibilities of the cloud and its increasing role in banks’ digital transformation journey:

Engaging better: Harness data to power insights-driven banking 

Leveraging data to put your customer first is key, and the cloud enables banks to do just that. A vast range of analytical tools and machine learning capabilities native to the cloud can enable banks to engage their customers with insights that can help them keep track of their spending habits or show them how they could be best saving money.

Banks are starting to realise this, with a Google Cloud report stating that 90 percent of banking respondents believed the cloud could play a part in helping financial services providers keep pace with changing customer preferences and expectations.

Operating better: Improve resilience with high performance and lower total cost of ownership

With the growing expectation from banks to provide 24/7 banking services, always-on systems and security is of the upmost importance. There can be no margin of error, as any lapses, be they outages or cyber-attacks, can cause significant operational, financial, and reputational risks for banks. Cloud-powered foundations of dynamic scaling and auto-load balancing can help banks ensure high performance even at peak workloads, and cloud-native microservices and containers bring improved scalability, speed, and flexibility with iterative, agile deployment. 

Innovating better: Leverage ecosystem collaborations to innovate at scale 

Traditional banks fall behind their digital-first competitors, who have the edge with their more mature, platform-based banking business offerings. By embracing iterative tech development methods, continuous deployment, and capabilities powered by the cloud, the incumbents can take a more rapid approach in how they bring their customer-centric, innovative products to market. 

The emergence of cloud-connected digital ecosystems and non-traditional players also creates opportunities for banks to explore partnerships unheard of before. Banks can seek out other players and take the lead in forging new pathways with them to offer better value for customers. The success of these partnerships will be formed by utilising the trust and customer base of traditional banks along with the innovative technology and know-how of up-and-coming fintechs to provide customers with new, convenient financial products and services.

The increasing role of cloud: Powering AI and other technologies 

While the role of the cloud in banking is no longer in question, the full power of its impact will be felt in its ability to power other emerging technologies such as machine learning, artificial intelligence and blockchain. It provides the massive storage and computational powers required by these technologies so that data generated across internet-enabled devices can be used by banks to improve their operations and enhance their profitability.

The way ahead for incumbent banks is to explore deeper synergies from emerging technologies—allowing the cloud to ease their transformation journeys and enabling them to take more confident strides in this rapidly evolving digital age.