The Cloud Lets Financial Institutions Break Through Legacy Systems

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The Cloud Lets Financial Institutions Break Through Legacy Systems to Deliver Agile, Digital-First Products

Cloud Technology Application

The Cloud’s Biggest Advantage? Security

Financial institutions have been especially slow to adopt cloud technology because of regulatory compliance issues that kept them tethered to legacy in-house systems. This is changing. Once considered a weakness, the cloud provides a safer option to outdated systems increasingly vulnerable to data hacking. RapidScale claims that 94% of businesses saw an improvement in security after switching to the cloud, and 91% said the cloud makes it easier to meet government compliance requirements. The key to this amped-up security is encrypting data being transmitted over networks and stored in databases.

Banks are discovering that legacy on-site systems are an inefficient strategy that allows little room for growth and innovation while limiting their ability to pivot and respond to customer demands. In contrast, the cloud gives businesses of any size access to the latest in services and tools so that they can build and operate high-performing resilient systems. Dell reports that companies that invest in big data, cloud, mobility, and security enjoy up to 53% faster revenue growth than their competitors. Instant Notification of Potential Breaches

The cloud brings instant alerts to potential data breaches and includes embedded security protocols against cybersecurity risks. Data is no longer stored in one physical location but is virtually located for instant backup and disaster recovery.

The Cloud Brings Flexibility and Agility

Traditional banking systems are rigid, making it expensive and unfeasible to develop new products and pursue a customer-first mentality. Other benefits of the cloud architecture include:

  • Cloud computing means banks no longer need to invest in hardware and software with a limited shelf life.
  • Faster Product Innovation: open banking, extending the customer reach for financial traditional and non-traditional banking services, with real-time testing to gauge market reactions, and quickly pivot to match demands.
  • Agility: Financial institutions can instantly respond to changing market conditions with the ability to leverage data and applied analytics to the customer experience.

JPMorgan Chase, the largest bank in the U.S., with $3.7 trillion of assets, is replacing its core retail banking systems with an Amazon Web Services (AWS) cloud-based technology. Lori Beer, Chase’s CIO, explains that the shift in strategy evolved out of a desire to innovate quickly to meet the changing demands of their customers. James Reid, the CIO at JPMC, says the cloud-based data mesh architecture is focused on four value factors:

  • Costs
  • Unlocking new opportunities
  • Accelerating time to value
  • Data reuse is a fundamental value ingredient

Chase’s cloud strategy also allows the customer to use one core banking system to access all their accounts; whether it is a loan or a debit account, the ultimate goal is to engage with the customer in a fluid motion that seamlessly moves from one transaction to another. The goal is to unite all aspects of the customer relationship from a siloed environment into a single platform for a unified customer experience.

The cloud gives financial institutions the capacity to respond to their customers and market conditions with more bandwidth and speed. The cloud also allows them to store data and apply analytics to get more value from this data. The result is better customer insights, improved efficiency, enhanced innovation, greater agility, and a reduced risk of security or business continuity breaches.

Does your team need cloud upskilling? Contact New Horizons Kingston to learn how to get your team cloud-ready.

Author: Mikayla Reid
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