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4 Prime Significance Of Cloud Computing In FinTech Industry

Introduction

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:

  • Introduction
  • Cloud computing’s influence on finance
  • Influence of cloud technology on the banking industry and financial institutions
  • Concluding Thoughts

Cloud computing’s influence on finance

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.

Influence of cloud technology on the banking industry and financial institutions

Data handling at its most sophisticated

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.

Self-service applications

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.

Scalability and adaptability

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.

Increased security

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.

Concluding Thoughts

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.

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Top 7 Cloud Myths

Cloud computing, naturally, due to its popularity, is something that is plagued with tons of myths. Naturally, these myths or misconceptions do have consequences, as they can delay innovations, slow the progress of an enterprise, and create fear where it’s not warranted. While cloud computing is virtually mainstream now, the vast majority of that growth occurring in the past five years, there are still many myths surrounding it. Cloud computing is essentially capabilities that are delivered as a service, with a boundary created between the consumer and the cloud service provider. For a lot of people, this becomes the source of all the misconceptions, as cloud computing becomes something more abstract. So it’s understandable that with all its success it has engendered a lot of misunderstandings and myths.

Amongst all the hype and confusion that continues to surround cloud computing, it’s in the best interest for CIOs to separate both fiction from fact, this can be done by learning about the various myths that surround the cloud, as of today.

1. Cloud Computing is Solely about Money

One myth, and probably the biggest one surrounding cloud computing is that migration to this service guarantees financial savings. While, in many situations, this is actually true, there are many different reasons why you may want to move to the cloud, with the most common reason being agility.

When it comes to business, any and all decisions, whether it’s the cloud or anything else, must be made, after considering the numbers. Even if agility is the primary reason, one must also consider the costs. CIOs shouldn’t assume anything, meaning, they shouldn’t assume that moving to the cloud will cut their costs, not without doing their own analysis study, first.

Experts have advised that specific models, including total cost of ownership, be used, on a case by case basis. So you’ll want to split the cloud into its use case, while looking beyond simple cost concerns. It’s very important that the projected cost savings are realistic, that the company doesn’t assume they’ll make significant savings simply because they’re on the cloud.

2. Just One Cloud Strategy Is Required

Multi-cloud is becoming increasingly more popular, as the days pass by, but despite that, you find that most businesses are still drawn towards simplicity. However, cloud computing is very broad, encompassing, many different services and infrastructure, which is why any devised cloud strategy must reflect this. Cloud services typically include many different models, levels, applications and scope.

For this reason, any cloud strategy must be able to accommodate, the various functions and uses of a cloud service. Any organisation must also realise that they won’t be able to get everything they require or desire from the one vendor. A cloud strategy that is based around one service, only works, if expectations are within its framework.

3. Use Cloud for Everything

Unless there is money to be saved, moving your old legacy application over to the cloud, may not necessarily be the best decision. The cloud tends to come into its own, when value is based on flexibility, when the company is structured around consuming and paying for solely what it needs, when it needs it.

For this reason one shouldn’t be afraid to accept the truth. That the cloud may not be beneficial for all workloads. As a result, non-cloud solutions should be considered as more preferable.

4. Cloud Is Not As Secure As On-Premises

Many people perceive cloud computing as not as secure. However, when we look at the number of security breaches suffered in the public cloud, we find that there have been very few. The vast majority of breaches are still experienced by on premise data centres.

This is why you shouldn’t assume that cloud service providers are unable to provide you with the level of security that you require. Of course, you should expect the cloud provider to be able to demonstrate its capabilities, but once they are able to do that, there is no reason for you to sway from what you know.

5: Enterprises Are Leaving the Public Cloud

The thought that workloads are now being shifted away from the cloud, is wishful thinking at best. When we look at legacy vendors, we must ask, who would stand to benefit from such a myth. The truth is, most enterprises that have moved to the cloud, are still with the cloud. That said, for those that have decided to move back, the vast majority of them have moved from cloud infrastructure as a service (IaaS), rather than SaaS.

One thing to bear in mind, is that some cloud migrations are unsuccessful. However, most organisations when face with cloud problems, are more likely to address them, wherever they arise, rather than take the more drastic measuring of moving everything back to their previous location.

6: Multi-Cloud will prevent lock-in

The vast majority of organisations will start off by using one cloud service provider, but may develop concerns about developing on the single vendor, which leads to them entertaining other vendors. When a company does this, it is known as multi-cloud. Multi-cloud has many different approaches, including a more functionality-based one. For example, an organisation may opt to use the Amazon Web Services, as their main cloud service provider, while using Google Analytics and Big Data in conjunction with it.

IT leaders need to understand that having multi-cloud as their cloud strategy, is not always sufficient in addressing the issue of lock-in. If lock-in has been identified as an issue, then a more streamlined approach should be adopted, one that focusses on tackling real solutions.

7. The Cloud Is a Must

Cloud-washing is basically the tendency of others to call everything the cloud, even it’s not. In many cases this is purely accidental, the result of confusion about the technology. However, there are many vendors and IT organisations that will refer to things as being the cloud in order to make sales, gain funding, and meet certain strategies and cloud demands. This all helps to feed the myth, that in order for an IT company to be worth its salt, it must be on the cloud.

The best thing you can do is be honest, which means, not referring to everything as the cloud. There are many other capabilities, such as virtualisation and automation that do not require cloud-washing in order for people to patronise it.

Author Bio:

Uchenna Ani-Okoye is a former IT Manager who now runs his own computer support website https://www.compuchenna.co.uk

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Cloud Computing Trends 2020

In 2020, Cloud Computing will continue to develop and evolve. Some trends will continue, but others will tend to fade. In order to prepare your business well for the coming year, and to better choose the components of your Cloud strategy, we offer you a list of predictions …

The rise of hybrid cloud and multi-cloud

By 2020, many companies can be expected to turn to the hybrid cloud . For good reason, being able to alternate between public and private cloud as needed is now seen as the ideal compromise .

According to Brian Wood, Director of Cloud Marketing at Teradata, companies will diversify their IT portfolios to combine already existing on-premises systems with Cloud deployments for new projects.

According to Bruce Milne, VP and CMO of Pivot3, the hybrid cloud will however be redefined by the software . Hardware will still be needed, but can be located anywhere. The software will take care of the coordination.

Meanwhile, SnapLogic’s CTO, Craig Steward, expects multi-cloud to become more popular than ever. For good reason, companies are increasingly turning to different Clouds to meet different needs .

However, InfluxData co-founder Paul Dix does not share this enthusiasm for multi-Cloud. According to him, the development of a multi-cloud environment requires far too much effort to be profitable …

Cloud and artificial intelligence

Artificial intelligence and Machine Learning will be combined with the Cloud to automate and simplify deployments in 2020.

Artificial intelligence is notably used for networking . Technology makes it possible to develop better networks and take advantage of insights to optimize the use of these networks. For example, it is possible to optimize energy consumption by automating maintenance tasks.

In addition, “explainable” artificial intelligence will allow the emergence of cloud-based AI services. For good reason, this explicable AI makes it possible to deal with concerns related to the ethics of artificial intelligence. All cloud giants such as Google, Microsoft and Amazon now offer “explainable AI” type functionality for their AI tools and this trend will continue in 2020.

We can also expect Google to incorporate artificial intelligence into its cloud tools like Google Drive. For example, an AI system to automatically sort files and folders could be created. Automatic correction on Google Docs should also become general, while a chatbot could be incorporated into the G-Suite…

The hype around Kubernetes is running out of steam

In 2020, deployments and management of Kubernetes clusters should be simplified to the extreme thanks to the appearance of open-source tools created for this purpose. These tools will respond to an increasingly pressing need in businesses.

Kubernetes should also continue its breakthrough in the coming year , and many companies will continue to explore the possibilities offered, such as the creation of serverless applications or the automation of data orchestration. New features could also be added.

Nevertheless, some companies might wonder if Kubernetes is really suited to their needs . Besides being currently complex to manage, this tool could also present security risks as it gains popularity.

An unprecedented security disaster?

In 2020, it is quite possible that a massive security breach will sow confusion in the Cloud Computing market. If this disaster occurs, billions of users could be at risk of losing their data .

Cloud providers will therefore need to review their approach to security . For example, the requirements for strong passwords may be increased and triple-factor authentication may become the norm.

The architecture of hybrid environments could also be revised to better separate data between Cloud and on-premises environments. Many companies could also move away from outsourcing to train their own teams of in-house cloud specialists.

In this context, we can also expect that the main service providers will decide to acquire small startups specializing in cloud security . They will then be able to offer new services focused on security…

A fully open source cloud

Obviously, Open Source will continue to dominate the Cloud in 2020. Going further, we can even expect that the Cloud will rely entirely on Open Source software by the end of 2020.

Companies specializing in Open Source, for their part, could launch cloud services to monetize their software . While paid training and after-sales service are no longer profitable enough, this strategy could be the most judicious. This is predicted by Evan Kaplan, CEO of InfluxData.

Edge Computing integrated into Cloud services

According to Michael Kollar, CDO at Atos North America, we can expect Edge Computing to be integrated into the main cloud services in 2020 . The functions traditionally reserved for the Data Center, such as calculation or data analysis, could be performed at the edge of the network.

For example, an Edge device can take photos of products on the production line and compare them with images of products that are working properly. If a problem is detected, it can be resolved in real time. This will allow analysis of data in real time, improvement of product quality, increase in revenue and customer satisfaction, and lower costs.