This Cloud Computing in Banking Sector Technical Paper discusses the basics of cloud computing, its benefits, layers and types of the cloud and its relevance to the banking Management sector. It further discusses the challenges and benefits for banks in embracing cloud computing and presents the situation banks are in today and the challenges faced by them in moving towards cloud computing.
The conclusion is that banks surely benefit by embracing cloud computing and that’s the next leap they have to take in order to grow their business.
Features of Cloud Computing Technology
Cloud Computing Technology a service which offers numerous advantages. Some of the important benefits of cloud computing are:
• Cost reduction: Cloud computing Technology can greatly help in reducing the costs since resources are acquired on a demand basis and charged accordingly
• Better usage of personnel: Since most of the interaction and work happens on the cloud itself once the cloud is set up, manual interaction required is very less. Hence personnel can focus on other things that deliver value instead of spending time on maintaining hardware and software
• Scalability: Cloud Computing Technology can scale itself up or down in terms of resources. It can scale up when there is more resource requirement and scale down when the resources are no longer required. This way resource can be effectively managed across the cloud and also the user is charged based on the resources used
Cloud Computing Technology and Banking
Like most of the other sectors, banks also are starting to move towards cloud computing for a variety of reasons. Since banks have to adhere to a lot of regulatory and legal requirements and customer and account data is of highest importance, banks always face a challenge in maintaining these. So banks need to be a lot diligent and cautious before moving on to the cloud.
The primary reason why banks started to look at the cloud is because of cost savings. Majority of the expenses that banks incur is on the infrastructure set up and usage of IT resources. Because of the cost and effort involved in this exercise, banks take a lot of time to roll out new applications to remain competitive in the market. Hence moving to the cloud is a better option to remain competitive and grow business.
Features of Cloud Computing Technology For the Banking Management Sector
Cloud Computing Technology can help the banking sector in the following ways which ultimately translates to cost savings, customer satisfaction and growth in business.
• Provide new and innovative services with reduced cost: By moving to the cloud, banks can utilize the services and latest technologies that the cloud has to offer. This way banks can leverage on the technology offered instead of investing in a new technology. Banks can also pay per use instead of dedicating their own resources. This is the biggest savings when compared to traditional computing where resources are dedicated irrespective of their usage and maintaining then involves a lot of cost Banks also can look at real-time processing and servicing by using the cloud in those areas where there is latency today. For example, banks can team up with post offices / credit card provides to provide real time experience to its customers
• Expand customer base and improve customer satisfaction: Banks can leverage smart applications available on the cloud to expand its customer base. For example, banks can tie up with cloud service providers for using applications like Smartphone which can help the customer do a lot of things online. This ensures round the clock availability of services to the customer, thereby improving customer satisfaction
Challenges Faced To Move to the Cloud
For obvious reasons, security and data privacy are the two main things that banks need to be concerned about when they are on the cloud. Banks are concerned that their data could be stolen or hacked or even mixed with data on the cloud or even compromised by mistake. Most banks treat their customer data differently depending on the relationship with the customer. Customer data and password may be less sensitive or highly sensitive. Situations like this should be well thought of before making a move to the cloud. For less sensitive data, banks may think of migrating to a public cloud and for highly sensitive data, they may opt to set up and manage their own private cloud.
Another challenge is the existing usage of legacy applications. Banks cannot modernize their infrastructure quick enough to move over to the cloud in a short span of time. Even if most of the applications are migrated to the cloud, the interaction between the legacy infrastructure and the cloud still needs to be addressed.