Cloud Computing in Banking: Everything you Should Know
The cloud empowers banks to enhance their data processing capabilities and eliminate the costs associated with maintaining servers on their own premises. Still, while benefits abound, cloud computing in banking is far from ubiquitous. In its survey, Accenture reports that only 12% of banks in North America use the cloud to handle their tasks. If your strategy is to break the confines of traditional on-premise server architecture and become “a bank in the cloud,” this post is for you.
Why banks embrace the cloud
There are many reasons why banks should embrace the cloud as fast as possible. Here’s a rundown of the most common benefits of cloud computing in banking as opposed to traditional physical servers:
Cost benefits. By embracing the cloud, banks can save costs on maintaining their physical servers. Typically, on-premises solutions usually consist of the following high-maintenance elements:
- Software license
- Power supply
- Cooling systems
- IT units
When moving to the cloud, banks can significantly reduce the cost of maintaining this architecture and only cover the following:
- A subscription to the cloud service provider
- A tech team
Most importantly, the cloud expands your capabilities when it comes to resource usage – you can switch off servers you don’t need at a given period of time. Also, cloud providers let you get a handle on cost management, so you can recalibrate your budget as you see fit, monitor spending, and optimize them.
Increased time-to-market. Another reason why banks embrace the cloud is that it allows them to reduce the time from ideation to launch, add new features, and roll out new product versions on short notice.
Cloud providers let you build out and configure the infrastructure within hours as opposed to weeks (sometimes even months) if you go with a data center on your own premises. The majority of cloud providers ensure a straightforward setup and offer various out-of-the-box solutions that may fit your needs. That way, new products (and their upgraded versions) can reach your market faster and as frequently as you need.
Scalability. In many cases, on-premise servers are incapable of competing with cloud services when it comes to scalability. If you need to expand your solution for a new market – the cloud can be the only way to increase the capacity instantaneously.
Cloud services offer different ways to scale while adhering to your demands. For example, for cloud computing in banking, it can be critical to increase computing productivity during peak hours and reduce it when the load decreases. This approach resonates with the cost-saving benefit of using cloud computing in finance, as it prevents using computing power irrationally.
Enhanced security. Providers of cloud computing in banking typically ensure compliance with Payment Card Industry Data Security Standard, a standard that is critical for meeting data protection regulations. Cloud services also include other extensive data protection capabilities and means to eliminate security threats.
Better recovery. Cloud solutions offer tools that ensure data recovery and help prevent failures. Thanks to this benefit, banks and financial services can ensure the continuity of their services, even in case of failure, as well as minimize the problems associated with data recovery.
These are the key benefits that spur the adoption of cloud computing among banks and financial services.
READ ALSO: Benefits of Hybrid Cloud for Banks
Cloud computing for financial services: Top providers
Microsoft, Amazon, and Google take the lead when it comes to cloud services, with brands such as Azure, Amazon Web Services (AWS), and Google Cloud, respectively. These solutions cover the needs of cloud computing in financial services: They provide data storage for rent and allow banks to increase or decrease computing capacity on demand instead of running their own servers year-round. Moreover, cloud solutions emphasize compliance with data regulations prevailing in different locations. Let’s take a look at the most common cloud computing providers for financial services:
- Amazon Web Services (AWS)
According to Gartner, AWS is an absolute leader in terms of market share among cloud service providers. It boasts a vast presence with data centers dotted across the globe, which lends itself to unimpeded data transfer. The fees are based on the pay-as-you-go model, in which users can select services they need at the moment and adjust the payment accordingly. AWS is also appreciated for its compatibility with financial services.
- Microsoft Azure
Azure is a runner-up to AWS in terms of cloud services adoption, which is currently available in over 50 regions, each maintaining a local data center. Azure’s model is known to be more affordable than Amazon’s and is also based on an on-demand payment model.
- Google Cloud
Google Cloud comes third in the competition for market share among cloud providers. Its services are available in 25 regions and span 200 countries. The payment model resembles AWS’s and Azure’s. Google has a special program for young startups and offers free service packages. Moreover, Google Cloud is unparalleled when it comes to implementing big data and machine learning, which are key services in banking that enable fraud detection, improve customer experience, and much more.
Cloud computing in finance: Talent availability
Adopting cloud computing in finance requires access to talent who can implement new solutions. Thus, it’s a good idea to set up a team skilled in ASW, Azure or Google Cloud to build out a solid cloud-based architecture using best practices.
As a company that builds teams of software engineers in Eastern Europe, we can say that hiring a skilled cloud solutions architect can be crucial for organizations looking to make the most of cloud computing in finance.
An outsourcing destination for many Western companies, Eastern Europe is a rich tapestry when it comes to certified AWS, MS Azure, and Google Cloud talent as well as DevOps, Docker, and Kubernetes specialists. According to LinkedIn data, the region entails 40,000+ Azure specialists. In addition, over 80,000 specialists list Cloud among their key skills, and a whopping 45,000+ specialists are specialized in AWS. Kubernetes and Dockers are featured as the top skills by more than 15,000 developers. It means that you can rely on Eastern Europe as a powerhouse of certified cloud specialists.
When properly implemented, cloud computing in banking can improve customer experience, drive innovation and help you stay competitive in the ever-changing world of finance. To create a solid cloud architecture for your solution, it’s best to work with a seasoned team with experience in the Finance vertical. We at nCube can help you build a team that specializes in modern cloud technologies, including AWS, Azure, Google Cloud, Docker, Kubernetes, DevOps, and other talent. Let’s connect.