The financial sector is one of those sectors that is benefiting massively from modern technologies like the cloud. The adoption is however still slow due to what analysts say is significant complexity and concerns over security, risk, governance and control.
A 2020 IBM banking on open hybrid multicloud survey even notes that, “While 91% of financial institutions are actively using cloud services today (or plan to in the next nine months), only 9% of mission-critical regulated banking workloads have shifted to a public cloud environment.” This presents a significant opportunity gap.
To address the need for capacity and speed, banks and credit unions must look to cloud computing solutions to store data and support applied analytics.
IBM notes that the scalability and agility available through a cloud-based infrastructure can better equip an organization to rapidly make adjustments and respond to market changes, such as those associated with the pandemic.
Recently, Google went big into financial service announcing a 10-year deal with American Globa Markets Firm CME Group. The deal will see Google move CME’s futures and options markets to the cloud over a 10-year period. The deal according to reports has several components, including a $1 billion investment from Google into CME.
Cloud-based infrastructure can indeed help banks make rapid adjustments in a volatile environment. Today’s banks IBM notes are challenged to reshape the customer experience through new platform-driven business models while also lowering operating costs. Concurrently, they must remain agile to rapidly respond to changing market and customer insights. ‘’This need for flexibility requires operational transformation to support continuous iteration and business model calibration. At the same time, banks must continue their focus on optimizing risk management, compliance, and security strategies, embedding them throughout their operations.’’
Last week, Microsoft also reaffirmed its commitment to assisting Kenyan financial services providers in their digital transformation by providing specialized Cloud solutions. Microsoft urged financial service providers to employ the cloud’s enhanced data analytics to identify outliers faster to respond to the newest criminal topologies and to conduct ongoing risk scoring.
The cloud allows financial institutions to easily leverage key capabilities, in the form of big data and AI applications. This emerging technology enables these organisations to rapidly speed up a number of processes, including automatically flagging potentially fraudulent transactions, automating credit reporting and analysing market trends.
Organizations have an enormous opportunity to leverage cloud computing to drive innovation and improve their competitive position according to IBM. ‘’Cloud computing – whether private, hybrid or public – enables organizations to be far more agile while reducing IT costs and operational expenses. In addition, cloud models enable organizations to embrace the digital transformation necessary to remain competitive in the future.”