Why banks should adopt cloud technology
The financial sector has not refrained from innovations, whether it’s new products to encourage customers to save more or new methods to interact with individuals and businesses, but digital transformation like cloud has been slow. In a new survey of IT executives in the banking sector, conducted by The Economist Intelligence Unit and supported by Temenos, more than seven in ten (72%) report that incorporating the cloud into their organization’s products and services will help them to achieve their business priorities.
Though the adoption of cloud technology is slow in Ghana, some banking and investment organizations on the other hand, have advanced their cloud adoption, offering insight for effective digitalization throughout the sector.
The correlation between cloud technology and financial services professionals according to the report analyzed the sentiment and operations of some medium-sized and big banking systems cloud technology. The findings reveal how the financial sector as a whole views cloud technology and how it might be used to improve banking procedures and efficiency.
SCALABILITY
The way people use their finances and banking systems has changed significantly, particularly when it comes to payments and transfers, according to a significant trend. According to the study, 86 percent of bankers have used cloud services to take advantage of its nearly limitless scalability, citing a significant change in transaction behavior as the primary reason for doing so.
Buy-now-pay-later, open banking, and cashless payment systems have transformed the way customers are interacting with their banks, enabling personal finances simpler and more convenient. Notwithstanding these breakthroughs, financial institutions are trailing behind challenger banks, which have less legacy processes and thus have an easier time migrating to new technologies like cloud computing and artificial intelligence.
Conventional businesses can quickly remodel and keep up with the advancements that ‘born-in-the-cloud’ challenger banks deliver to customers thanks to the cloud, which provides a dependable, expandable, and customizable data infrastructure. A hybrid and multicloud architecture is becoming increasingly popular as a means of doing this.
Most businesses are contemplating diversifying their cloud – based services, with 76 percent of bankers now saying that implementing cloud – based systems is critical in order to take advantage of the major cloud providers’ improved resilience and security. As they continue to develop, these cloud ‘hyperscalers’ also provide frequent updates and continue to introduce innovative digital programs and platforms.
COST OPTIMIZATION
According to the report, cost reduction is the key reason why banks are turning to the cloud for their future storage needs, with 81 percent of bankers indicating that they have implemented cloud technology to save money.
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Installing and maintaining on-premise IT systems is time-consuming and expensive for financial organizations. When using the cloud, however, acquiring and installing hardware is no longer necessary because the cloud service provider hosts all of the necessary infrastructure. This includes hardware maintenance, thereby lowering the entire cost of IT support.
OPERATIONAL LASSITUDE
Typically, technological advancements are lauded for their capacity to simplify processes, making them faster and more secure. According to the findings, 62 percent of bankers consider organizational culture and inertia to be a major concern in the industry.
Aside from being scalable and cost-effective, cloud technology may improve organizational efficiency by allowing banks to devote less resources to manage the link between trade volumes and payment infrastructure. Bankers see this opportunity, with 95% of organizations recognizing that cloud technology may reduce time-to-market.
DISPELLING THE MYTH
Fallacies about any developing technology are common, and the research revealed that this phenomenon persists with cloud technology.
Research shows that bankers indicated that security concerns had stymied full cloud adoption – a problem that has been routinely reinforced when engaging with financial services firms. Cloud providers, on the other hand, spend extensively in the security of their cloud infrastructure, making it nearly always safer than its on-premise, client-owned alternative.
One element of cloud adoption that continues to be a source of worry is the so-called “digital skills gap.” More than half of banks say a shortage of cloud-savvy workers has hindered adoption. This is a big challenge for cloud technology adoption in all industries, including banking, and it is critical that organizations give training and encourage young people to obtain the necessary skills to enter the field.
THE FUTURE
In the future, cloud technology will be the dominant choice for banks looking to innovate and extend their operations while minimizing risk, time, and expense. Bankers recognize these benefits, and the study’s overall findings indicate that they will continue to increase their investment in cloud technology.
While it is difficult to evolve existing legacy systems, cloud technology continues to grow, and I believe that it will become a dominant mainstay within the financial services industry over time.
