Cloud is driving positive IT change in a number of industries and has been doing so for several years. However, financial services have been very slow adopters for a number of reasons. Primarily regulatory restrictions, fear of the unknown and limitations of making legacy systems cloud ready. Yet challenger banks such as Oaknorth are leading the way with cloud banking solutions that are providing business benefit.
One of the main reservations of the banks to investing in cloud banking solutions was the absence of guidance from the FCA. That guidance has now been provided, although further clarifications are expected in due course. But the clearest signal is the FCA’s approval of banks such as Oaknorth, and their commitment to innovation through programmes such as Project Innovate.
The primary benefit of cloud banking is the opportunity to provide standardisation across the organisation, and the ease of upgradesand updates. Furthermore, cloud technology offers endless scalability that is incredibly beneficial for banks who have peaks and troughs in business activity. Here is a whistle stop tour of some of the other benefits:
Benefits of cloud banking:-
Speed – Provisioning new systems and functionality is incredibly fast.
Security – Cybercrime is incredibly rife but cloud providers make protecting your data and systems their number one priority, so you do not have to be concerned with the details.
Resiliency and availability – Cloud technology is architected in a way that provides high availability with many layers of resiliency.
Innovation – Many cloud providers, particularly the principalproviders such as AWS, develop cloud based services and innovate for large enterprises.
Furthermore, many organisations are finding that by investing in cutting edge technologies, they are attracting the best talent who want to work in innovative ways. The advantages are far reaching but cloud adoption has been slow within the banking industry, as the risk averse monoliths cautiously just dip their toes in the water. There are some obvious quick wins to be had that are lower risk than putting core banking systems in the cloud such as storage of back up data loads, and even portions of the data centre. A natural step from there is to do new developments directly in the cloud, and from there begin migrating legacy apps.
Cloud bankingis here to stay and in the coming months and years we will witness wider adoption, not just by the challenger banks, but also by the older and more traditional institutions. Customers want and expect to bank across multiple mobile platforms, at any time of the day or night and wherever they are in the world. Furthermore they expect their data to be secure and easy to access. Cloud banking solutions provide a platform to meet the requirements of customers in the digital age.