How Cloud technology is transforming the fintech landscape in India
Cloud adoption has grown leaps and bounds in many industries. However, cloud adoption among the fintech industry has been slower. To accelerate the fintech industry’s digital capabilities and maintain the pace at which rapid migration to digital technologies is moving, the fintech industry too is now moving from experimentation to implementation.
As per a Logic Monitor Survey, 87 percent of global IT decision-makers agree the pandemic will cause organisations to accelerate their migration to the cloud, anticipating a decline in on-premises workloads by 2025. Companies worldwide spent $34.6 billion on cloud services in the second quarter, up roughly 11 percent from the previous quarter.
As Satya Nadella, CEO of Microsoft, states, “We’ve seen two years’ worth of digital transformation in two months.”
When such is the pace of digital transformation, the fintech industry is no different. They have realised that as an industry, to cope up with changing times and adapting to growing demands, it is imperative to rethink how technology is enabling virtual work, remote working, and to use Cloud as a major differentiator in matching the fast paced digital acceleration.
Cloud is the future of fintech
While the argument to adopt agile technologies in fintech was on, COVID-19 struck and left decision-makers no choice but to fast-forward the process and innovate for survival.
“Not only are more organisations moving their infrastructure to the cloud, but over 55 percent say they are using multiple public clouds,” says IDG Cloud Computing 2020 Study.
Today, fintech is rapidly adopting cloud technologies for its core services along with support and operational activities.
Agility has not only helped these institutions improve interaction with customers, staff, and shareholders, but also reduce cost, improve collaboration, and increase innovation.
Fintech’s tryst with Cloud
Currently, financial institutions and banks are not using the cloud for their core services entirely. Agile technologies are greatly being used for non-core processes, but with increased demand and service offering, it has become imperative to use the right technology to offer core activity in areas such as regular banking, customer payments, billing, credit, etc. Most changes are seen by smaller fintech firms which are quick in adapting to these changes.
However, having realised the advantages of Cloud, the biggies in the industry are following too and looking for innovative and easy solutions that can be fruitful for customers interacting with them.
Cloud adoption in financial services
Financial institutions have understood the need to be agile and how it can help them become future-ready. Cloud computing scope is no longer just limited to cloud-based platforms, applications, and business processes, but it is also focused on how to open new avenues for fintech industry in terms of:
- Creating and delivering great products, services
- Interacting with customers
- Generate revenue and allow partner collaboration
By moving to Cloud, the fintech industry can gain to build a more flexible and customer-centric business model that is known to drive profit & grow.
Benefits of cloud computing for fintech
Adapting to any new technology is hard, and the inability to execute such migration at different scales can increase challenges and risks. However, the benefit of moving to Cloud can be more fruitful in the long run than not moving. Here are a few benefits if you are moving your fintech business to cloud:
- Easy access to on-demand processing capabilities
- Faster catering to the ever-growing need for innovative solutions
- Faster ongoing releases through cloud-based technology
- Improved customer experience via AI, ML, and process automation
- Flexibility to scale up & include additional apps & databases
- Agility to optimise products and services quickly & securely
- Access to data & insights with connected data sets enabling better decisions
- Increased pliability to physical outages & service interruptions
Cloud transforms fintech industry
Cloud migration in fintech is transforming the industry and making it future-ready through the following ways:
The volume of financial data used and shared globally is huge. Cloud technologies allow fintech firms to store and manage data in a secured and trusted way along with enabling them to benefit from artificial intelligence at lending, payment and fraud detection segments.
Seamless cloud migration
While some companies opt for a hybrid model that allows existing infrastructure and agile technologies to collaborate seamlessly, few opt for the hybrid model to deploy cloud-based sandboxes in order to increase customer acceptance of new services and offerings without interrupting the existing structure.
Agile technologies also help financial institutions with flexibility and enhance capabilities to combat financial crime.
According to the information age report, around 42 percent of financial services firms lack the capability to provide data security making it a major concern. Cloud technologies provide the same level of security as traditional structures when properly implemented.
Agile technology and apps allow fintech firms to focus more on innovation in order to improve productivity.
Onboarding services become fast and the ability to instantly launch new services or products in the market increases. Additionally, scaling up or down becomes easy, enabling businesses with resource reallocation, innovation, and rapid service delivery to end consumers.
Reduced maintenance cost
While in-house hardware and data storage units not only consume space and resource, it also adds to the overall maintenance cost.
On the other hand, cloud technologies owned by third-party service providers reduce overall operational and implementation costs associated with server or data management plus security.
From being just a buzzword and ambitious project, Cloud technology has now become a driving force for businesses globally. Especially in a pandemic hit remote work culture, agile technologies will become vital than ever. With everything going digital it is crucial for the fintech industry to adapt and innovate quickly with cloud regardless of the business size.
Edited by Megha Reddy
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)