The 21st century is the cloud era. Not only are more companies migrating their infrastructure to the cloud, but nearly 55% of respondents to the 2020 IDG Cloud Computing Study claim they use several public clouds and a substantial portion (32% of firms’ IT budgets) is devoted to this purpose.
With alleged benefits like accessibility, ease of use, and rapid implementation, it’s easy to understand why organisations are attracted to financial software development companies like Tatvasoft.
However, what does this signify for fintech?
Cloud computing is gaining traction in financial services. While acceptance is still in its infancy, growth is accelerating – 22% of all apps are already hosted in the cloud, with significant opportunity for development. This tendency will have an effect on both startups and existing incumbents. Banks can collaborate with fintech much more simply when using cloud technology, and startups are designing as cloud-native from the beginning.
Table of Content:
- Cloud computing’s influence on finance
- Influence of cloud technology on the banking industry and financial institutions
- Concluding Thoughts
Cloud computing is a growing trend in fintech, owing to the significant influence of cloud services on meeting many of the financial sector’s requirements. The cloud has benefited the financial sector in a variety of ways, including security, service, innovation, and scalability. Cloud computing has even been credited with helping the sector achieve its projected compound annual growth rate of 23.84 %.
Therefore, why are cloud computing companies critical to financial services? Fintech start-ups and traditional financial companies are adopting cloud computing and racing to improve the speed, reliability, and availability of their digital goods and services for consumers and end-users. Cloud-based financial services offer all of this at a cost-effective price point while also offering greater security in an era of increasingly strict regulatory compliance.
The financial services industry’s lifeblood is data. It is critical for a variety of tasks, ranging from financial data management, data storage, managing user data and cloud storage, routine account administration to authenticating user identities, showing balances, and analysing spending trends. Cloud computing enables the financial industry to securely store, manage, and access massive amounts of data in a cost-effective and autonomous manner, from any location and at any time.
When the epidemic began in earnest in early 2020, remote self-service technology was in desperate need. This requirement will last throughout the crisis, and even after the epidemic is over. On the other hand, it may rise, particularly in light of the ongoing closures of brick-and-mortar bank branches.
Individuals and companies alike require the capacity to open and handle their money remotely, but it goes beyond that. Internal personnel must be able to control procedures remotely. Self-service apps built on cloud technology enable businesses to rapidly deploy this technology.
Cloud computing’s broad applicability and advantages are critical to its quick acceptance – both startups and established organisations stand to profit significantly from these technologies, from cost savings to agility to creativity.
For large banks, business cloud migration has sped up operations and simplified the way they approach relationships. Due to the fact that well-known companies have been transparent about their deployment of cloud technology, this has sparked more activity throughout the sector. Other banks are seeing that these firms are able to develop more quickly and collaborate with fintech much more seamlessly.
“The majority of large banks are either working with or competing with fintech,” explains Wendy Luebbe, Barclays’ Head of Enterprise Data & Analytics. “We are not a provider of infrastructure. We wish to concentrate our efforts on financial services. As a result, we’re moving to the cloud as a strategy, concentrating our efforts on becoming more nimble with application development, increasing our competitiveness, and truly growing our business.”
Cloud technology also has significant ramifications for startups, particularly given how many are establishing themselves as cloud-native from the outset. By using the customisation that cloud computing enables, these businesses can become more agile and grow more readily.
Customers are highly conscious of how their personal information is secured in the era of great data theft and cyber security assaults. The financial services sector has a right to safeguard its clients’ data, and the cloud is enabling financial firms to do so more effectively. From data encryption to zero-trust verification and access control, cloud computing in financial services mitigates many of the hazards associated with traditional on-premises IT systems.
Over the last few years, the financial services sector has transformed how customers interact with their products and services, owing to the growing demand for big data, the need to adapt to increasingly stringent regulations, and the emergence of smaller players competing with established financial institutions. We can anticipate the industry will continue to innovate in the near future.
Additionally, we may anticipate several advancements as a result of cloud computing’s effect, including predictive modelling to prepare for ‘what if’ situations, automation of front-end sales and customer-facing settings, and self-service capabilities enhancing customer care.
Cloud computing is critical to the success of financial firms. It enables financial sector organisations of all sizes and types to incorporate scalability and flexibility into their business models, enabling them to achieve agility and remain competitive in a continuously changing market. Additionally, financial services firms may leverage cloud computing to enhance security, comply with stringent regulatory standards, and simplify their historically complicated infrastructures.