Today, virtually every sector of the economy is betting big on cloud computing. This year, who is also intending to adhere to this technology is the banking industry, which until recently viewed it with 'bad eyes'. According to the CipherCloud report, which was attended by 102 financial institution representatives from over 20 countries, 61% of them said they are already creating a cloud strategy.

This is due to the urgent need to increase their profit margin, meet customer wishes – such as access to their account from mobile devices – and, above all, gain competitive advantages in the market. Only with the cloud will institutions be able to achieve all these objectives and still reduce their operating costs. Below, see the overview of this migration of banks to the cloud.

The harsh reality faced by banking institutions

With increasing competition, all banks across the world are facing an extremely challenging business landscape. This is aggravated mainly due to consumers, who, thanks to the explosion of the mobile trend, started to demand more and more innovative services and to have total control of their bank account from mobile devices. Below, we list other challenges they are facing:

  • Increasing reduction of profit margins;
  • Customers who expect a rapid evolution in the range of services;
  • Entry of new companies into the market each year, increasing competition;
  • Increased pressure to develop social and sustainability programs;
  • Regulatory frameworks and constant government supervision.

Even facing this harsh reality, many banks still carry out their operations on systems created more than 30 years ago, well before the spread of internet use across the planet. Therefore, many managers are considering the idea of ​​gradually replacing these systems with cloud computing and starting to develop an agile and flexible banking environment that really meets new business needs.

How cloud computing promises to reverse this scenario

There is no denying the fact that cloud computing is revolutionizing the business ecosystems of many industries, and banking is no exception. Acting in an increasingly worrying scenario, where mere milliseconds can mean losses of hundreds of thousands of shares, institutions need agility in their operations while reducing costs. Below, see how the cloud can reverse this scenario:

Dramatically reducing operating costs

With the cloud, banking institutions can reduce their operating costs and increase their revenues. This is because there is no need for them to invest in their own IT infrastructure and hire a team of professionals just to monitor it and keep it in full operation. In addition, companies can only pay for the services they use, the so-called pay-per-use payment model.

Ensuring business continuity

From the moment a company adopts the cloud, responsibility for managing its technology park falls to the supplier. With this, it can be more agile in issues such as handling operational failures and disaster recovery. The technology also offers a high level of redundancy and back-up at much lower costs than traditional in-house managed solutions.

Offering agility to respond to the market

The flexibility provided by the cloud allows banks to develop their products and services more quickly and proactively respond to customer desires and market challenges. In addition, after being hired, it can be quickly implemented in the company, which allows managers not to waste their time solving IT issues and maintain focus on more important matters.

Promoting environmental sustainability

Companies in the banking industry can also use the cloud to promote their brand as a protector of the environment. This is because, by eliminating their IT infrastructure, they end up reducing electricity costs and minimizing the amount of carbon dioxide (CO2) generated by the Data Centers that 'sustain' their technology park. Thus, they earn the 'sustainable seal' and manage to gain competitive advantages in the market.

The main cloud trends for the banking industry

These days, those banks that continue to operate with expensive and inflexible systems are at great risk of being put out of business. Your managers need to know that only with cloud-based solutions will they be able to react quickly to the challenges posed by both customers and the market itself, with an extraordinary cost-benefit ratio.

Its benefits are so many that, according to a survey carried out by the Ovum consultancy, most retail banks already consider the cloud a “common business”, whose importance has been growing mainly due to the search for agility and support for the entire business ecosystem. Still according to her, all banks should have a cloud-oriented strategy, focusing on the transformation of their businesses in the long term.

Have you seen how much banks will be able to progress thanks to cloud computing? What other benefits do you think this amazing technology will bring to these institutions?

Written by

Sky.One Team

This content was produced by SkyOne's team of cloud and digital transformation experts.