Entering the World of Cloud Banking

With the advent of digital technologies, every sector has benefited. The sector which has benefited the most is the banking and financial services institutions (BFSIs) sector. The BFSI vertical is at the core of every economy across the globe and it possesses the power to make or break the economy, and that fate is hugely connected to this sector's innovation roadmap. Every progressive business is migrating to digital solutions to expand their operational nexus and with that, tap into new revenue streams and earn big.

The said solutions do not just improve the back-office operational structure, rather it enables businesses to improve their interaction with the customer and eventually, deliver the best of experiences which play a critical role in building a sustainable revenue stream for any business. Considering the model of the BFSIs, they are closer to customers than any other sector, and their relationship with customers matters the most. Hence, the necessity of shifting to digital solutions becomes stronger, and among the technologies with the greater power of delivering quick and exceptional results, is cloud technology. 

If one is to wonder "Why cloud?", then we have just the answer to that. The cloud provides a flexible and scalable infrastructure for the BFSIs to store, manage, and access data and applications. With the spiking demand for digital solutions in the BFSI sector, the question can be rephrased and ought to be "Is cloud computing really the catalyst to building the banks of the future?"

Referring to the research, the banks can maximize their operability and with that, their growth by employing cloud computing. The primary benefits include:

  • Increased efficiency 
  • Reduced costs 
  • Improved customer experience
  • Fortified security infrastructure
  • Reduced downtime Banks are able to leverage cloud technology to provide real-time services, reduce downtime, and enhance security measures.

With the above-mentioned advantages coupled with other features, banks can interact and facilitate their customers in real time by increasing the accessibility of their services to the customers beyond their working hours. How so? Well, the banks are not available during 9-5 only now. Customers can easily perform their banking activities through mobile or web applications with the support teams always at their disposal to resolve any issue that may arise. That fast-tracks everything for the customer.

Even if the support teams are not available, the customers can leverage AI-powered virtual agents such as chatbots to get their queries with automated replies or raise their technical queries to the relevant personnel by interacting with the chatbots.  Not only that, AI and the likes of Machine Learning (ML) can help run predictive analytics that helps the bankers in making informed and real-time decisions and counter critical areas beforehand such as fraud or regulatory violations, as well as customized offerings based on the real-time attained data of customers entailing their behaviors and preferences. 

Indeed, there will be challenges in the early stages of shifting to cloud such as data preservation, regulatory compliance, and the cultural shift of course! The article also highlights some of the challenges that banks face in adopting cloud computing, such as data privacy and security concerns, regulatory compliance, and the need for a cultural shift within the organization. Referring to our research, the link is shared below which can be used to review the recommendations to resolve these challenges. All in all, the benefits of cloud technology for the BFSI outweigh the challenges which can also be resolved with careful measures taken.


Reference article: https://doi.org/10.1016/j.jfs.2022.101073 

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