How a Cloud-First Approach Can Transform Modern Banking

Cloud has enabled banks to innovate with new-age technologies and achieve better results. Here, Anant Adya, senior vice president, cloud, infrastructure, and security (CIS) services at Infosys, dives into how ready-to-use services and capabilities from cloud providers can reshape banking operations.

Cloud has played a critical role in transforming banks globally. Even before the COVID-19 pandemic, we had started to see the beginning of what was being described as the golden age of digital banking transformation. Earlier, cloud was being adopted primarily for building efficiency, cost variability, and total cost of ownership (TCO). Today, we see a tangible shift in expectations from cloud implementation.

Building Resilience and Responsiveness With Cloud

With an impact on economic activity due to the pandemic, banks are looking to cut costs, rapidly launch solutions, and create business models to meet changing market needs. They have to achieve this while complying with the most stringent regulatory and security standards.

The focus is on boosting market responsiveness, supporting accelerated innovation cycles, and building resilience. 

Banks can function better with resilient, flexible, and secure systems leveraging the power of cloud. This helps build customer trust. Many of our clients are adopting hybrid cloud strategies to keep pace with the post-pandemic environment’s demands.

Hybrid cloud strategies can help pursue sweeping modernization initiatives — including operational and customer-facing programs supported by AI, blockchain, and other emerging technologies. Cloud-based platforms can support a remote working environment to collaborate with employees and connect with customers ensuring business continuity.

The ability to organize, ingest, and analyze a significant amount of data by cloud-based data and analytics solutions can help in better decision-making in real-time with minimum errors. For example, AI can help banks in their capital planning strategies by predicting credit and loan defaults. Automation of processes frees up valuable time allowing teams to focus on strategic activities. 

Cloud implementations proved extremely valuable when banks had to modify their working model to accommodate the COVID-19 lockdown mandates. For example, most banks do not provide remote access to service management tools to their employees when it comes to customer care. 

To address this challenge, one of our banking customers adopted a cloud-based service management platform to minimize its operational risks and enable faster and efficient service requests. This resulted in a 10% reduction of the TCO due to lower service delivery costs as service requests were resolved four times faster. 

While the implementation was completed pre-pandemic, it proved extremely valuable during the COVID-19 crisis since it allowed their employees anywhere-anytime accessibility enabling seamless complaint resolution. The problem boosted the adoption of cloud, along with other digital technologies.

Learn More: Banking in Public Cloud: Here’s What Financial Institutions Need To Consider

Why Cloud is Foundational for Digital Transformation 

Resilience through better integration, cost-saving, and responsiveness

With fintechs and volatile economic conditions challenging the market, banks need to become cost-efficient. Cloud allows banks to opt for a pay-as-you-go model, helping reduce upfront investments required for digital transformation. It brings scalability as they can access additional capabilities in both computing and analytics every time there is an increase in online demand for services ensuring adequate compute infrastructure to support workloads securely and at scale.

By creating customized workflows, connected databases, and sophisticated insights, the cloud can integrate the different departments in a bank through shared platforms and tools. This helps in quick decision-making that is data-driven and unified, improving its ability to respond faster and better to market changes and solving customer challenges.

For one of Norway’s largest banks, a data lake based on serverless architecture was implemented. The solution ensured a quicker time to market with continuous integration and continuous delivery. A fail-fast approach helped the bank dynamically evaluate newer opportunities.

Learn More: Gain Control Over Public Cloud Spend in 5 Steps

Boost innovation and IT Security

Banks have always been concerned about security and regulatory mandates when considering the cloud. However, with an increase in the adoption of cloud-based platforms, the industry has matured with cloud providers providing security that maps up or exceeds the security available on on-prem infrastructure. With cybersecurity protocols becoming an ingrained habit within the entire banking organization, it is no longer a deterrent to cloud adoption. Cloud offers a tech-debt-free environment that is compliant with banking regulations, such as SOC, HIPAA, and PCI-DSS.

Cloud has provided the platform for banks to experiment and innovate with new-age technologies such as AI, ML, IoT, AR/VR, NLP, and others to create new capabilities that help them with better outcomes. Today, cloud providers offer ready-to-use services and capabilities, enabling digital banking and finding new monetization opportunities. 

For example, AI-based chatbots supported by cloud infrastructure are becoming common across banks to help with their customer interactions. These bots leverage pre-built conversations, offer self-service capabilities and understand simple human language to serve different business areas such as ITSM, HRSD, CSM for the bank. 

Learn More: What Is Public Cloud? Learn the Basics of AWS, Google, IBM, Microsoft Azure, and Oracle Cloud

Wrapping up

To summarize, emerging and new technologies supported by cloud platforms deliver superior, personalized customer experiences, create new products, business models, optimize their operations, and ultimately increase their revenue.

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