Why Cloud Computing In Banking Industry?

Since the inception of cloud computing, we’ve several organizations from the Banking and FinTech world who are incrementally migrating to it. The amount of data produced and consumed is increasing exponentially in the financial sector. The need of an hour for banking organizations is to install systems that scale. The technology provides more control with improved transparency to audit processes and information. It offers a better scalable solution for data classification.

If you’re considering creation of cloud solutions but aren’t sure how it fits into the financial organization, this blog is for you.

Here is what we’ll cover;

• Benefits of Cloud Computing in the Banking Sector
• Cloud Computing challenges that BFSI players face
• How to choose the right model
• How to leverage the Cloud Operating Model

Cloud has emerged as the catalyst for enterprise business transformation for a financial services organization. As banks are gradually adopting cloud technology, it’s essential to operate better in the future.

• Improved Data Security
  The financial impact of a data security breach is undoubtedly one of the most hard-hitting consequences. It can cost millions of dollars. And while data breach is on the rise, most banks still rely upon on-premise systems. Cloud computing has paved the way for a successful alternative that prevents data tampering. It provides an up-to-date customer-centric platform with excellent security to safeguard banking data.
• Better Cost Optimization
  Using a legacy on-premise system results in a significant challenge for adaptability to frequent organizational changes. The possible benefit of this technology is its ability to adapt to the ever-changing needs of organization expansion. It allows you to use the exact amount of resources based on your needs. As a result, this helps you save money on infrastructure, ongoing operational cost, server space and IT employee resources. The unique model allows financial institutions to pick and choose services on pay-as-you-use models.
• Increased Efficiency
  Cloud technology in banking helps financial services organizations to streamline operations with improved efficiency. Payment processes can be further simplified by connecting both buyers and sellers on a shared application. This helps improve transaction speed and easier to track data.
• Business Continuity
  Cloud computing can assist banks and financial services firms with increased data protection, fault tolerance, and disaster recovery for financial firms. It provides a high level of redundancy and back-up at a comparatively lower price than traditional managed solutions.
• Agility and Transformation
  Financial organizations can experience shorter development cycles for new products through flexible cloud-based operating models. The related technology supports the faster and more efficient response to the needs of modern banking customers. It enables businesses to shift non-critical services, including maintenance, software patches and other computing issues. This helps financial firms focus more on business growth.

It is the right time to realize that cloud is a transformational model, which can drive the banking business to the next level. Banks should make it a point to make a shift gradually yet steadily to advanced architectures for increased productivity and ROI.

Despite the numerous benefits of cloud computing technology, many financial organizations are still hesitant to adopt it. Here are some challenges that stop banks from implementing it:

• Data and Security Privacy
  Bank data contains sensitive information. Keeping it protected from cyber breach is paramount for banking sectors. With any technology, security remains an issue; the cloud is no exception. The security breaches incidents are inevitable but preventable.
• Regulatory and Compliance
  As a bank, it is mandated for you to comply with stringent standards. Many banking regulators require that customer’s financial data located in the same country. Certain compliance regulations require valuable data not to be intermixed with other data – on shared servers or databases. So, banks must have a clear understanding of where their information resides in the said environment.
• No Complete Control
  Giving control of your critical business applications and data is a significant concern for financial firms. Handing it off to a third-party cloud service provider might reduce the facility of being flexible and agile. So, not having control of a large volume of data deters companies from moving to the cloud.

Financial firms must choose the right partner, services, operating models, and deployment to address security, control and compliance concerns.

Suppose you’re a financial firm planning to move from a capital-intensive approach to a more flexible business model to lower operational costs. In that case, it is essential to consider an experienced vendor. The key to success lies in choosing the right services model that matches your business requirements.

Business Process-as-a-Service (BPaaS) – This model is used for standard business operations such as billing, payroll and human resources.

Software-as-a-Service – In this model, business software and related data are housed by the service provider. Users get access to software and data via a web browser.

Platform-as-a-Service (PaaS) – They offer a complete platform to businesses to develop, run and manage their applications. It eradicates the need to engage in infrastructure complexities. PaaS helps streamline the development, maintenance, and support of custom apps.

Infrastructure-as-a-Service (IaaS) – Despite investing in software, servers, network equipment, or data center space, enterprises can purchase these resources as fully outsourced services.

It is vital to choose a suitable delivery model with the required mix of resources and assets. Rishabh Software works with global customers across the listed three operating models:

Skillset Capability Development
Financial organizations can gain expertise by hiring resources with the right skill sets as per the need. This model provides flexibility to choose the best resource pool for the varied requirements.

Virtual Captive
This model provides a dedicated pool of experts or centers to help with cloud operations and meet demand. It is an excellent alternative to an absolute outsourcing approach.

Outsourcing Vendors
In this operating model, offshore centers, facilities and resources from third-party vendors manage operations. It blends resources and investments to cater to the services for multiple banks.

Getting your operating model right is the key to driving business growth. Our specialists can assist you design and build your cloud infrastructure. We identify the best way to manage your hosted services. Our development focus on cloud computing technology in the banking sector includes:

• Customer Data Analytics
• Customer Relationship Management (CRM)
• Enterprise Content Management System
• IT Development and Infrastructure

To conclude, cloud computing has immense potential to deliver massive cost savings to the finance industry. It can help transform the digital landscape to achieve your business goals, ensure compliance and data security. While selecting the ideal services partner, banks must consider many aspects, including strategy, regulatory compliance, technical compatibility and cybersecurity. As a cloud application development company, Rishabh Software is at the forefront of this focus to provide development, reengineering & integration services to support financial organizations – which is our prime goal.