Cloud technology is one of the expeditiously developing technologies and continues to gain traction. It is a significant enabler of many other disruptive technologies like IoT, AI, and big data. Cloud computing services are proven solutions to many interior banking problems. The primary catalyst for adopting cloud computing within the banking sector is the provision of a high level of security.
Other concerns that cloud computing addresses are 24/7 uptime and interoperability. It, therefore, gears banks to remain competitive. Before we plunge further into what encourages banks to embrace cloud technology, let’s know what it means.
What is Cloud Computing Technology?
Cloud computing technology is an application for data storage over the internet. It is the delivery of computing services of servers, databases, storage, networking, software, and analytics over the internet. The companies that offer cloud computing services are called cloud providers. They charge for these services based upon usage. Cloud computing is becoming a one-stop solution to any information-related problem.
Cloud services are available in three common ways such as Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and also Software as a Service (SaaS).
Cloud computing enables bankers to connect directly with their users. It is a platform that creates the possibility of relating to customers anytime and anywhere. Both the banks and customers can easily access information at their convenience. Banks can easily integrate cloud computing with all their services and save time and effort of the user.
Benefits of Cloud Computing
Banks derive plenty of advantages from cloud computing. Here are the benefits of cloud computing:
1. Productivity
Cloud computing helps to fix tasks related to information thereby freeing user’s time to concentrate on building more business. It eliminates tasks such as racking and stacking data in the banks.
2. Cost-effectiveness
There is no more need for banks to invest in proprietary infrastructure. Therefore, the capital expense of purchasing hardware and software to setup a data center is eliminated. The banks operate and maintain their data through their cloud provider’s environment.
Cloud providers additionally provide cost flexibility. You need not pay a flat fee for their services, but rather use ‘pay-per-use’ option. Staffing costs are also taken care of as your internal teams don’t need to do regular updates of hardware and software.
3. Security
Banks enjoy enhanced security with cloud technologies in a way on-premise systems cannot. Enhanced security is most significant in smaller banks with limited IT budgets. The banking setup typically requires the provision of mobile access to clients, workforce flexibility and access to the internet. These demands create exposure to cyber threats. Cloud platforms are developed with cyber threats in mind; thus they are more secure.
Cloud computing provides encryption service with additional layers of data encryption for applications that the providers don’t control. Therefore, data is secure at all times and wherever stored.
4. Flexibility
Cloud computing enables banks to respond quickly to customer’s needs, market needs, and technological changes. It is quite easy to scale cloud’s capacity according to your needs. Banks can maintain their competitiveness with the ability to deploy new projects and quickly have them up and running. With cloud, it is also easy to move from one application to another.
5. Reliability
Failure rate for cloud infrastructure is negligible. It provides a complete backup to information. Cloud computing allows data access from multiple redundant sites. Hybrid cloud model again offers high security to the data in addition to data encryption which eliminates any security threat. The kind of security it provides makes both public and private cloud to be reliable.
6. Business Continuity
Cloud computing supports recovery and data backup at a lower cost than traditional solutions. The high level of data protection, disaster recovery, and fault tolerance strengthen business continuity. Banks, therefore, acquire even more confidence from the nature of this platform. They enjoy the distributed nature of storage and processing, ability to shift data and remotely accessing the cloud in the event of a disaster.
7. Risk Mitigation
The cloud can reduce the risks associated with conventional, traditional technology. Concerns like redundancy, resilience, and capacity are optimally handled. The ability of cloud technology to scale-up provides banks with more control over an issue like security. Nevertheless, your contribution to risk mitigation also matters.
It is therefore advisable to assess your risk appetite in the cloud and deploy preventive boundaries. Though cloud providers will always emphasize there is flexibility and security, banks should maintain their own security infrastructure. Being safe is better than being sorry.
A bank that has not capitalized on cloud computing is sidelining itself from development. Business competitiveness being the focus of every bank, the cloud paradigm is a great enabler here. Banks can use it to enable themselves to focus on the customer-centric model. It is also the solution to ever-growing data input needs.
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