Cloud adoption is already in its peak way to become the foundation of businesses that want to stay agile, cost-effective, and innovative.
Recently many financial service organizations are adopting the cloud to deliver innovation, customization, and security to generate a unique competitive advantage. Analysts say that public spending will likely grow from $229 billion in 2019 to almost $500 billion in the year 2023. Also, it is anticipated that the three major industries likely to adopt cloud are professional services, discrete manufacturing, and banking.
The financial companies are typically the first into technology trends, and the last out, and so is the case with the Cloud. Banking sectors are migrating their core services such as customer payments, wealth management, risk analysis, and credit scoring to the cloud. It is the COVID-19 pandemic that has provided the push, underscore the importance of shifting core systems to them and upgrading them.
The unexpected urge caused by this pandemic has forced the financial sectors to reexamine their ways to digital transformation, with extra attention towards the cloud-centric culture. It must use the cloud to address new and on-going regulatory changes, new demands from customers, the implementation of emerging technologies, and the adamant competition from agile FinTechs.
One of the reasons behind cloud adoption is the signals sent out by the regulators. Regulators have been circumspect when it comes to cloud technology. However, it is changing now. As an example, the Australian Prudential Regulation Authority (APRA) acknowledged the risk associated with the cloud but also recognized the risk of the current situation. Also, ARPA’s interest in advancing safety and security and the need to take a cloud-first approach by updating its risk advice associated with the cloud shows the confidence it has. Prudently, APRA suggested that banks must look forward to developing contingency plans that will allow cloud services to be provided through alternate means if necessary.
As we are looking forward to going along with the cloud, financial service providers will have to shuffle their priorities, going much beyond leveraging the cloud for scalability and cost-efficiency, the new areas to focus on will include Robust Digital Foundation, Technology platforms, Enhancing IT security, Driving Innovation, and Enterprise synchronization.
To stand out from the crowd to gain a competitive advantage, innovation and customization are often needed from both the cloud provider, as well as professional services.