Migration will pave the way for a company connected to the payments ecosystem to enable new ways to exceed customer demands and deliver enhanced services of the future. Moreover, transitioning to the cloud will improve performance, bolster security, and help ensure compliance with a changing regulatory landscape. In short, the cloud will be fundamental to digitally transforming a company.
Banking, financial services and insurance (BFSI) companies have witnessed the payment environment going digital, with the industry moving increasingly to mobile, remote, and other digital offerings. And customers are not only open to the digital transformation, they are driving it as well. A J.D. Powers 2021 survey found that 41 percent of retail banking customers have now made the move to go all digital, up from just 30 percent before the pandemic.
Driving the momentum
“For financial institutions to keep those digital customers engaged and maintain a competitive edge, they need to deliver advanced services, from instant mobile payments to online virtual assistants and chatbots that offer financial advice and recommendations and even handle customer relationship management.”
This can be achieved by leveraging cloud services to enable innovation using advanced technology such as blockchain systems, Artificial Intelligence (AI) and Machine Learning (ML) to improve customer service and better understand consumer behaviour. Cloud platform can help keep up with current fintech developments by streamlining the payments process, improve credit decision making, and enhance fraud detection.
A step further, cloud deployment can also improve interoperability. For example, they offer banks the ability to access data and transfer information from a variety of IT systems and head offices to third party vendors. Cloud services also help as more institutions adopt ISO 20022, which is the emerging global standard for sending payment instructions between local, regional, and international financial organizations. With better security and compatibility, and with the development of advanced real-time payment infrastructures across the globe, it supports the instantaneous delivery of accurate and complete payments data. Such interconnected services also mean improved analytics so managers can make smarter decisions going forward.
Agility and performance
The interconnectedness of a cloud platform also improves an institution’s agility by making it easier to develop programs that can communicate with each other and coordinate transactions across multiple payment applications.
“A cloud infrastructure allows financial institutions to rapidly develop new online services securely by allowing for testing and usability before releasing it to customers.”
It not only allows for increased personalisation for customers but also allows collaboration with partners via a cloud-based open banking infrastructure to seamlessly integrate more services and in turn boost competitiveness.
Performance is a critical component of such implementations since payment and financing is an around-the-clock online service. Cloud services take care of having to maintain constantly updated software and data centres to support such technological demands. They are also equipped with capabilities to deliver banking IT systems that are available 24/7 and instantly scalable, reducing the pressure on financial companies to make huge capital investments. Dedicated cloud services also offer high-bandwidth access and on-demand scalability so that customers never experience a delay even during high-traffic times.
Regulations and resiliency
Cloud services have also become more sophisticated and are able to meet regulatory requirements from numerous countries and agencies. Spanning from commercial institutions focused on local government banking guidelines to dealing with privacy and security regulations, compliant cloud platforms can help companies navigate through this seamlessly. They also can take responsibility for meeting IT banking, data residency, data sovereignty, and data privacy regulations, while supporting any audit needs.
Moving to the cloud is also a recommended way to improve security. Ransomware is now a daily occurrence with 61 percent of businesses reporting that they were infected last year, according to Mimecast.
“Protecting and maintaining cyber security defences has become a large undertaking for many companies. Cloud services can alleviate some of the burden by keeping up to date with all the latest security patches and updates.”
Moreover, unlike traditional perimeter-based security, cloud can offer protection across multiple layers, including customers, partners, remote access, storage, network connections, and web apps. For financial services it also includes embedded security compliance with payment card standards, government security regulations, accounting and computer security standards.
With digital adoption surging and payment gateways witnessing more transactions every day, a holistic move to the cloud will be imperative to drive customer engagement, offer innovative services, improve performance and tighten security.
To learn more from Rajesh, please read this blog on Enabling service delivery for Bharat.