Digital transformations have been accelerated in every imaginable sector this year. But as Martin Moyers highlights, banking firms are in a unique position to prosper. Here, he outlines how banks can migrate to the cloud successfully.
An ongoing challenge for traditional banking is the speed at which they are migrating to digital. The cloud has become an essential tool for the development of companies in a constantly evolving competitive market. Technology providers are turning more and more to the cloud, and on-premises deployments are shrinking as Software-as-a-Service enjoys greater adoption.
While the cloud has become one of the pillars of IT across all industries, many banks are still hesitant to take advantage of the present cloud options. Today, I’m going to outline the strategies that banking firms must embrace to migrate successfully to the cloud.
Understanding the Cloud
Legacy systems are impeding the ability to transform digital banking, affecting the end-user experience. People want to perform operations like checking accounts online, making payments, and making transfers instantly, but outdated systems don’t allow this. These frictions in user experience result in a potential loss of revenue for banks and even damage to reputation, as the corporate client segment depends on banking services for their businesses’ operation both locally and internationally.
Simultaneously, ‘Big Tech’ has accustomed customers to access solutions, products, and services 24/7 in real-time and from anywhere. These expectations are also reaching the banking world. In fact, according to a Nationwide survey, 4 out of 10 British consumers expect to be able to open their bank accounts instantly, even though only a third of traditional banks can facilitate this.
If traditional banks do not respond to these demands, they run the risk of becoming irrelevant and losing market share. Banks must digitize their offerings as soon as possible to remain competitive and react quickly to the challenges posed by neo-banks and other competitors.
If traditional banks do not respond to [evolving consumer] demands, they run the risk of becoming irrelevant and losing market share. Banks must digitize their offerings as soon as possible.
Cloud Banking: Turning Banks into Digital Leaders
Banks looking to improve their competitiveness need to develop a cloud-leveraged digital transformation strategy. Thanks to Cloud Banking, financial institutions can rapidly create new applications and add new services, thus overcoming a continually changing industry’s challenges.
According to Steve Culp of Forbes magazine, for banks to harness the power of the cloud and become digital leaders, they need to implement well-framed strategies. Here are the four strategies that the banking industry must implement to harness the power of the cloud and compete with new players in the industry.
1. Transform Processes & Tools
It is essential to move from the experimentation stage to real and comprehensive production based on minimum viable products (PMV). In parallel, controls across the organization must evolve to be appropriate for cloud infrastructure and solutions.
To do this, banks must seek strategic partners to help them react quickly to challenges in the banking sector. The experts understand that agility is the foundation for our clients’ success. For this reason, beyond providing technological solutions, Zymr is an agile-minded company that has adopted best practices to improve the agility of our clients’ businesses, accelerating productivity, time to market, and the quality of the process and the project.
2. Engage with Customers
Bank customers are evolving, and their expectations are increasing. Contrary to what was previously believed, customers are not one person or a segment, but many, with unique needs and characteristics.
Understanding customer needs enables banks to find new ways to add value through personalized products and services. This is essential to design a cloud-based digital strategy since, as you better understand what customers want, it will be easier to identify the most appropriate cloud solutions to respond to those needs.
3. Invest in Skills
According to the report “Accenture Cloud Readiness Report – Banking,” 94% of the surveyed banks claim to have a team in charge of defining and executing the migration strategy to the cloud, but only 45% qualify as “mature” or “advanced” in cloud infrastructure management skills.
These skills gaps could be a significant obstacle to the mass adoption of Cloud Banking. For this reason, banks must bet on the development of the skills necessary for cloud management, especially about applications and infrastructure.
4. Turn Strategy into an Action Plan
It is not enough for banks to develop a cloud strategy. For this to be implemented effectively, it is essential to have a methodology and a roadmap that facilitates the transition to Cloud systems to promote innovation and digital transformation within institutions.
Banks are increasingly realizing that to compete effectively in a world where new competitors are constantly emerging, they must become digital leaders. To do so, cloud technologies are an indispensable element in your digital strategies; it is comprehensive, for example, to enable banks to provide customers with the on-demand service they are accustomed to from retail companies and other consumer industries.
Banks are now taking their first steps in this new virtual space. More often than not, it’s about experimentation, but others have taken the plunge and have already moved some of their infrastructures to the cloud.
About our Guest Writer
Business Analyst, Zymr, Inc.
Martin Moyers is a business analyst and an avid tech blogger who is associated with Zymr, Inc. He is obsessed with AI-ML, cloud technologies, and the universe of social media. In his leisure time, he enjoys rafting, sailing, and hiking.