The banking industry basically seems to have many of the same IT challenges as many other industries. We can summarize these challenges briefly as below:
- Infrastructure scalability requirements,
- The need for continuous application modernizations,
- User pressure encountered to create better customer experiences
But in addition to all these, much higher stringent data security and compliance standards are required in financial services than any industry may need. At this point, the state of the art cloud computing services and cloud solutions can be powerful cutting edge tools to meet these demands simultaneously.
Types of Cloud Computing Services
According to Gartner’s latest report, the cloud computing services market is expected to grow 17.3% and to be $206 billion in 2019, up from $175.8 billion in 2018. By 2022, 90% of organizations will be using cloud computing services.
Being able to benefit from cloud services and technologies that are growing and developing significantly each day has become imperative to stay competitive. For this, it is very important to determine the needs and learn what the service methods are in more detail.
Basically, here are the three main types of cloud computing services:
1- Service Infrastructure (IaaS)
Infrastructure as a service (IaaS) represents the basic building blocks for cloud IT and often provides access to network features, computers (virtual or private hardware) and data storage. With IaaS, you can rent IT infrastructure – servers and virtual machines (VMs), storage, networks, operating systems through IP-based connectivity as part of the optional service.
2- Platform as a Service (PaaS)
Platform as a service (PaaS) represents cloud computing services that provide an optional environment for developing, testing, serving, and managing software applications. PaaS eliminates the need for organizations to manage basic infrastructure (usually hardware and operating systems) and allows you to focus on the distribution and management of your applications.
3- Software as a Service (SaaS)
In the Software as a Service (SaaS) model, you don’t need to download the software to run and update your desktop PC or business network. It is a cloud-based service that you access through an application from your internet browser on request, and usually by subscription method. The software application can be anything from an office software to a unified communication between other available business applications.
Customer relationship management (CRM), corporate resource planning (ERP), human resource management, accounting, billing and service desk management outputs can be managed and delivered using this model.
The Advantages of Cloud Computing Services for Financial Institutions
Forrester’s research has made it clear that the public cloud market has been growing by 20% and there are obviously many reasons behind this rising trend. Even though its name has a very abstract perception, the “cloud” offers very tangible benefits for both customers and businesses. Here are some benefits of cloud technology in banking industry:
Cost reduction
Cloud computing services significantly reduce the cost of all capital made to purchase and install hardware and software in data centers. By using the cloud computing service, provider’s resources can substantially reduce costs on maintaining and managing IT systems. Here are some reasons:
- You do not need to hire expert personnel
- Provides a great reduction in your energy consumption
- New hardware, software and system upgrade costs are often included
- Time delays are noticeably reduced
Enhanced data security
Data security can have serious consequences for both users and financial service providers. Data breaches can cost serious material losses for both parties. Cloud computing services store big data in a cloud environment, thus providing complete data backup of information needed anytime, anywhere. Data saved in the cloud is well encrypted to eliminate any security threats that the financial service provider or customer may encounter.
Therefore, banks should pay attention to the following criteria when choosing cloud service providers for the management of financial data:
- Certificates and standards
- Partnerships
- The most advanced technology
- Transport support
- Reliability and performance
- Service dependencies
Synchronization
Cloud solutions enable better integration of business units through data. This leads financial institutions to be more agile, and to move faster in making integrated decisions and solving customer problems.,
Financial institutes can create common or connected data sets with data analysis and thus provide deeper, more advanced insights and data analytics. They can design much faster and more effective decision-making processes by increasing collaboration through shared platforms and tools.
Feasibility and flexibility
Cloud solutions help financial organizations to pay for technology on an operational basis, away from high-tech capital spending. Thus, companies can have the flexibility to respond to market changes or changes in financial priorities faster.
They can achieve cost efficiency in dynamic cloud pricing in the professional services they provide by increasing or decreasing their computing capacity as needed and by facilitating detailed spending control.
Regulatory and compliance
In an industry where cross-border transactions have become the norm, cloud computing can help banking industry and financial services firms meet the ever-evolving regulatory reporting requirements in many jurisdictions, such as Critical Comprehensive Capital Analysis and Review, and Payment Power.
Cloud solutions can also help banks perform day-to-day liquidity and risk calculations and use commercial surveillance data to prevent money laundering and other fraud issues. A cloud platform provides data tool placement capabilities based on critical data and Certified Security Professional certifications.
Sustainability
Data, installed systems, and increased security are key factors for a sustainable business in terms of providing financial services companies both for long-term revenue growth and for reducing their environmental impact. Cloud computing services can help as follows:
- Backing up, saving, and restoring data in a cloud gives financial institutions the chance to focus on their business growth
- Increasing employee productivity with easy access to data
- Reducing the risk of IT infrastructure issues and security breaches
- Lower carbon footprint with the reduction of paper waste
- Improving energy efficiency and reducing suburban emissions
It is possible to stay competitive in the banking industry and financial services sector, and to maximize efficiency while reducing costs by using cloud computing services. Discover ForInvest’s cutting edge solutions, developed with over 30 years of financial software development experience and be a part of this innovative world.