The banking and financial sectors, unlike other industries, have been a bit slow in embracing cloud computing. WHY? But today, banks are fast realizing the benefits and the key role cloud computing plays in shaping their future, ensuring business continuity. Adopting the right cloud transformation strategy can put the banking and financial services sectors right on the digital curve and transform their cloud operations management, saving costs, and improving scalability and overall efficiency.
The global market for public cloud services in BFSI was estimated at $49 billion in 2021 and is set to reach $189.4 billion by 2031, accelerating at a CAGR of 14.6% from 2022 to 2031.- Allied Market Research
The rapid growth of cloud services within the BFSI market is attributed to the many digital transformation initiatives adopted by corporate financial institutions plus increased penetration of digital payments and transactions facilitated by mobile and internet services.
Traditionally, the banking and financial sectors have been slow in adopting new technologies. By nature, they are risk-adverse and security aware.
But of late, banks and financial service institutions are rapidly transitioning and moving steadily moving towards emerging technologies especially the cloud, as they are fast realizing the benefits of adopting cloud computing for their future growth and business continuity to achieve greater operational efficiency and increased customer engagement.
Embracing technological innovations like cloud computing is crucial to increasing efficiency. While Innovation, customer-centricity, cost reduction, increased cloud compliance with regulatory standards, and a need for having a simplified, scalable IT infrastructure and eco-friendly banking structure – are a few reasons driving banks and the financial services sector to move to the cloud.
Benefits And Impact of Cloud Computing on the Banking & Financial Services Sector
- Reduced Costs, More Efficient IT Spend & Workloads: BFSI sector can save money by moving its applications and data to the cloud. The pay-as-you-use model of public clouds makes it viable for financial services to use the services. While IT spending can be reduced by shifting the maintenance to the cloud and focusing more on innovation, revenue generation, business continuity, and optimizing workflows.
- Enhanced Performance, Speed, and Accuracy: Cloud platforms are built for speed and high performance. They can handle and process more data quickly and easily by automating routine tasks. This enables Banking and financial services to deliver large volumes of daily transactions at speed and at scale, ensuring operational continuity without any disruption and reducing latency problems. By automating crucial processes, duplication of data and other human errors can be prevented, saving time and costs.
- Access from Anywhere/Anytime: Location will no longer be a constraint if your employees are trying to access your business applications and software when you have embraced cloud services. It is fast, has zero downtime, and ensures security and privacy. Hence, it drives operations in an agile way, further allowing flexible working times for the staff.
- Increased Collaboration & Operational Efficiency: When interacting with third parties or suppliers, banking and financial services can remotely share their apps- they can access, edit, and share information securely irrespective of their location and time. Cloud-based file sharing implies the updates are delivered in real-time providing better visibility and transparency. Moreover, by deploying the right solutions banks can achieve their goals of increased quality control, higher disaster recovery and loss prevention, and well-optimized risk management goals.
- Marching Towards Green IT: By minimizing the redundancy of physical IT infrastructure setup, with cloud computing banking and financial institutions can save energy and emit fewer greenhouse gases thereby reducing idle time and helping businesses become more productive.
- Data Security and Fraud Detection: Data security has been the number one concern for banks. The major reason why they were feeling (and they still are) reluctant to move their data to the public cloud over on-premise. Most banks feel their ‘all-important’ crucial data should reside on-premise; but not anymore. Today’s cloud computing models and advanced technologies and security features ensure the bank’s/user data stays safe, and shielded under multiple layers of protection away from cyberattacks, phishing, and other cyber breaches. Moreover, today’s cloud technology powered by data analytics, AI, and ML can detect and report all illicit, fraudulent suspicious activity from scores of millions of transactions before they cause harm.
If you need help in formulating a cloud strategy or you’re thinking about migrating your data to the cloud, or need support in meeting stringent compliance requirements, ThoughtFocus can help. Our cloud migration, containerization, microservices, and app modernization services are available now to support your business in a smooth digital transformation journey, making your business future ready. Reach out to us at firstname.lastname@example.org and our cloud experts will contact you back at the earliest.