In the old days, banks have been resilient on legacy systems and were often reluctant to make changes in their technical infrastructure. However, it doesn’t mean that banks or other fintech companies were not adapting according to digitization or they were not building web apps for their customers. As banks have a huge number of sensitive data, their main concern about technology was moving from in-house servers to clouds. But a rising number of financial institutions are now considering initiating banking in the cloud as the perceived security concerns misconceptions are now dispelled and the benefits are significantly considerable.

What is Cloud Banking?

Cloud banking refers to utilising the cloud to store and access data generated by users and employees of financial institutions through their application software. The cloud has been proven to be an excellent technology that offers exceptional data handling, scalability, agility, and high-end security to banks. It allows rapid deployment of services, higher flexibility to adapt marketing needs, and reduced expenses in coming out with new applications. The cloud means banks will no longer need onsite infrastructure management so that they can focus on value-added services that are closely aligned with core business goals.

Banks that are moving into the cloud must see it as a gradual transition and start with opting for the most urgent services and workloads to transfer in a highly controlled way. It will ensure that the workloads are being moved securely, customers are not being impacted by downtime and nothing is lost during the completion of this process.

What is Driving the Financial Industry To the Cloud?

Banks are looking for faster and agile solutions to offer excellent services but what has actually driven the financial services industry to move to clouds at such an increasing pace?

  • Need for Flexibility & Agility

Most financial institutes have an abundant amount of legacy systems that are simply lying there while consuming the resources. These systems are mostly monolithic and difficult to scale and modify. On the other hand, cloud-native web apps are on-demand and can be scaled according to the requirements.

  • Need for Real-Time Information

The requirement of real-time information is essential for every industry but it is highly required in the financial one. The financial sector often supports high-frequency trading apps that can analyze data and search for price changes and rate movements in the market. These apps have the responsibility to identify trends before other investors and execute changing orders within milliseconds. If the lag of a few seconds could cause the loss of billions. The requirement of reduced latency is another key factor driving cloud adoption in the FSI.

  • Increasing need for Data Storage

Storing massive amounts of data and information without any loss or redundancy in the process is one of the crucial parts of operations in the financial industry. However, the advancement in technology such as analytics, machine learning, big data, applications, and automation have only grown the size of data which surely needs an upgraded infra to handle continual data growth securely. It makes the need for data storage a driving factor for cloud banking.

  • Higher Security and Compliance Requirements

It’s a well-known fact that the financial industry operates around banks, insurance, capital markets with each profile having a specific need for regulations. There are numerous laws layered around different countries that financial institutions have to adhere to. But with the cloud and its enhanced security features, it can become easier to maintain security and compliance while identifying any potential risks.

Conclusion

Switching to cloud banking can help banks to accelerate the digital transformation that they need. It can help with improved speed and agility, lower operations costs, improved customer experience, and higher security. But to do so, it is crucial to have a team of developers who have relevant experience and can help you in building your web app that is cloud-based or move your current in-house app infrastructure into the cloud.