Cloud-based banking is vital in building strategic partnerships
With cloud-based banking rapidly gaining popularity even amongst large financial institutions, its true value in building partnerships that drive new innovations, lower costs and create a better customer experience is unlike any other.
The move to cloud-based computing has been growing steadily across many industries, yet cloud adoption in the financial sector is noticeably slower due to strict regulatory and compliance requirements when possessing confidential customer information and because data center regions are often outside of the financial institutions’ region. While this has previously set back financial institution cloud adoption, attitudes towards cloud-based banking are quickly becoming more positive. Fintech challenger banks and smaller financial institutions have proven that cloud-based banking is not only viable but profitable, and a 2020 research report commissioned by IBM showed 19 of the top 20 banks in the USA have announced public cloud initiatives. Indeed, more than 50% of institutions believe that their workloads will be running on the cloud in by 2024.
Source: Celent FI Survey, December 2019
There’s more to cloud-based banking than meets the eye
By now, most of the benefits of cloud-based banking are common knowledge. It purports to reduce overhead costs and shrink IT infrastructure and operations expenditures by being more efficient and reducing the need for hardware to develop and maintain services. Furthermore, it is scalable and flexible, allowing financial institutions to respond to changes quickly and efficiently. It allows for a more in-depth look at data, allowing banks to identify security breaches by monitoring their end-to-end processes, utilise new technological innovations like AI and machine-learning, and update applications and software without delay.
Be open to global providers
With cloud-based banking, financial institutions can choose from software solutions across the globe. Previously with traditional set-ups, banks were burdened by their physical servers and often found it difficult to switch providers. However, this is mitigated by the cloud: switching providers has never been easier. Cloud transformation is a long-term industry shift which will see software vendors offering increasingly better, more competitive, and more effective solutions as the cloud matures and more providers appear on the scene. Although companies need to take care to avoid vendor lock-in and becoming dependent on one cloud provider, cloud-based banking allows financial companies to quickly adapt to market changes and unexpected needs.
That said, avoiding vendor lock-in is not the same as turning down partnerships with vendors. Indeed, the real secret to the potential of cloud-based banking lies in the partnerships it is able to create. When cloud-based banking is used correctly, it creates a network of close relationships with software providers. According to the 2021 Capgemini World InsurTech Report, tomorrow’s most successful players will not only embrace an ecosystem mindset but orchestrate effectively a rich ecosystem of partners.
Benefit from WealthTech that fits you
As a new and digital solution, it is no surprise that FinTech and WealthTech start-ups and small companies have jumped onto providing cloud-based solutions. A great benefit to partnering with WealthTech companies also includes being able to access more than just a cloud-based platform but also relevant wealth management modules compatible with core banking systems including digital advisory tools, CRM, portfolio optimization and much more.
Start-up and corporate partnership is mutually beneficial. During interviews with corporate executives, McKinsey found that many see partnerships with start-ups as a way to bolster and increase the speed of innovation and product development. Likewise, 75% of start-ups found corporate partnerships to be extremely important. Partnerships give financial companies a way to explore new, unexplored technology solutions in a cost-effective and time-efficient manner, as well as gain early insights into new and disruptive technologies. Furthermore, although it may seem surprising, start-ups do not seek partnerships for financial gain. Instead, they prefer to benefit from the reputation boost as well as accelerated growth that comes with having a corporate partner, as well as the positive message it sends to both current and potential investors and clients.
Privé Technologies is proud to have been one of the pioneers of cloud-native technology in Hong Kong, partnering with Amazon Web Services (AWS) in 2011. Through our cloud-based and modular approach, clients can tailor our services to their unique needs, without undergoing a wholesale replacement or system exchange. From robo-advisors, to CRM and portfolio management, all of our modules are able to integrate seamlessly through scalable microservices, allowing our clients to avoid vendor lock-in whilst at the same time benefiting from our unparalleled breadth of products and services.
With the future of the financial industry looking to be interconnected and extremely networked, forging the right partnerships can become a significant competitive advantage. Cloud-banking is absolutely necessary in order to fully capitalize on the breadth of software and digital solutions available on the cloud.