Financial institutions are facing a crucial challenge, avoid falling behind in the new age of digital banking. After years of using traditional methods, they have come to realize how tedious banking operations really are.
Cloud banking promises to revolutionize the banking industry and fill in the gap that traditional banking operations have failed in engaging with clients, but still has to overcome challenges such as regulations and bolster security to assure its effectivity.
At first the banking industry seemed reluctant to explore any IT solutions but the evolving market has increased the pressure until they accepted to implement diversified options technology had to offer.
4 main benefits of cloud banking
Today, only a small amount of financial institutions run core banking in the cloud, but analysts have estimated that by 2012 most banks would have migrated from traditional core systems to new technological infrastructure.
These are some of the key benefits cloud banking has to offer to improve the traditional banking systems:
Due to the fluctuating market conditions, banks need their core systems to be flexible enough to meet the customer demands immediately and also they have to be scalable so they can keep up with their processing capacity.
To solve any security issues, banks have the option to build a hybrid cloud so the relevant data is kept in a private cloud while bank employees can access other data and applications according their needs thanks to remote flexibility.
2. Cost reduction
Since the cloud is available on demand, banks do not need to invest in infrastructure and hardware that eventually will become obsolete, they pay just for the services and products that they require.
Migrating bank operations to the cloud can help reduce expenses in several tradicional bank areas, it avoids the investment in additional servers, staff training and in the development of applications because the providers already have that figured out.
Besides that, specialist Likhit Wagle, General Manager, Global Banking and Financial Markets, IBM Global Business Services, claims that cloud-based models are able to save up to 40% on annual operations and IT budgets by displacing redundant technologies.
3. Client engaging
Banks users want to keep track of their accounts through their mobile devices, so cloud computing helps them access easily from any location at any time.
Also, these type of services can be customized to provide better insights into their clients' needs and expectations about the remote operations.
4. New products available
Cloud banking is a flexible platform that allows the integration of new products that keep the banking sector updated and helps an efficient response to the customers demands.
That is how banks can migrate non-critical services to the cloud such as loans and account origination processes so they can focus their manpower effort in other business financial services.
Have you heard about credit origination automation?
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