The cloud can power innovation for financial institutions. As reported by McKinsey, 70% of banks are reviewing their core banking platforms and are beginning to leverage the potential that cloud-native services can deliver, as well as the offerings provided by technology vendors.
This is an extract from ‘Innovate and Launch: How Banks Can Securely Leverage Cloud into New Markets,’ a Finextra Research impact study in association with Mambu, part of the AWS Cloud Series.
Digitalisation through cloud migration
When a bank or payments provider moves to a digital banking platform, cloud migration is a fundamental part of the process. Deloitte highlights that success with process re-engineering and efforts at digitalisation with emerging technologies such as artificial intelligence are dependent on cloud computing.
Organisations have the option of embracing cloud through a number of ways, which range from a simple ‘lift and shift’ to the more comprehensive refactoring or replatforming approaches, the latter two approaches being more forgiving toward the thorny challenges of migration.
While the lift and shift method may appear to be the most efficient method of migrating pre-existing workloads because of the smaller amount of work involved, not all approaches are suited to this method. Today, lift and shift is outdated.
Cloud migration, for any firm, is complex and no two firms will have the same journey. The key factor here for financial institutions is to collaborate with the right cloud services provider and the right technology partner.
In order to stay agile, launch new products quickly and cost effectively, cloud is essential for banks and payments providers. This will even allow traditional players to compete with nimble fintech startups and well-funded financial services firms.
Security with agility
Security and compliance are primary considerations for banks and payments services providers adopting the cloud. SaaS banking platforms that support composable API-enabled architectures allow banking and payments firms to operate like technology companies.
Working with providers like Mambu running on Amazon Web Services (AWS), firms can scale their core banking business and innovate faster while operating in a secure, compliant environment. Deloitte highlights that the extreme security standards of cloud providers are backed by strong track records, and that these environments which are equally if not more secure than on-premises, provide the ideal setting in which to launch and scale at pace.
The flexibility of the cloud also allows technology providers to support banks and payments firms in addressing a wider client base, from small microfinancing firms to large corporate organisations. This can take the form of driving access to transformational technologies available solely through the cloud or by expediting time to market for new financial products.
The unprecedented pace of change is pressuring banks of all sizes to increase agility and accelerate innovation. AWS helps them to structurally lower their cost base, bring new ideas to market at breakneck pace, and create more elegant customer experiences – all while meeting stringent security, compliance, and regulatory requirements.
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