The sky’s the limit for the financial sector
May 2015 | EXPERT BRIEFING | BANKING & FINANCE
A technological revolution has taken place in the banking sector over the last decade. Customer expectations have evolved, causing the financial industry to reassess the tools it utilises to help drive business.
Most modern consumers have been exposed to the digital revolution for many years now and have a sound technological understanding. This brings a degree of expectation from customers, particularly in the financial sector, that there should be instant access to a range of data and services through a user-friendly medium that has been individually tailored.
This has resulted in the industry having to respond to these new challenges through the development of more innovative IT offerings. The way in which banks manage, analyse and consume data has had to be reviewed, while ensuring that the high level of data security offered remains at an optimum.
This overhaul in the technology offerings of the financial sector has resulted in the introduction of applications for instantaneous banking services, 24/7 customer care and the rise of online payment solutions such as PayPal and Google Wallet.
The financial sector’s innovation and commitment to a technology-driven future is also evident through the different ways in which banking can be accessed. Long gone are the days of in-branch banking. The financial sector now operates via telephone and online banking, with more and more customers using mobile technology including smartphones and tablets to access banking apps.
As financial technology continues to develop and gain popularity, one key technology proposition that stands out as growing exponentially is the use of cloud technology.
Cloud computing is becoming increasingly prevalent in the industry, as the range of benefits it offers the sector becomes better understood and business leaders become more confident in its offerings. This has also been confirmed in a recent report from the Cloud Security Alliance (CSA).
The CSA report highlights that 61 percent of financial businesses are developing a cloud strategy within their organisation, while 32 percent already have a cloud policy established.
Many banks have already invested in migrating services to the cloud, allowing them to streamline basic business functions, including HR and admin processes, while enhancing the company’s bottom line. However, the cloud is not just about cost savings. Adoption of cloud technology also enhances productivity in the financial sector, providing a newfound agility to financial services. This allows 24/7 access to secure files and provides a modernised, cross-channel banking experience that focuses on the customer’s needs. Hosting services on a private cloud means that banks are better positioned to respond rapidly to economic uncertainties, allowing for quick adaption of services to meet the ever-changing nature of the industry – without having to deal with the costs of expensive hardware and manpower.
However, as with any upcoming technology, there is widespread concern throughout the industry over the strength of the overall security that the cloud offers, particularly for protecting the sensitive information held by financial sector companies.
The CSA report is unequivocal on security; all respondents who haven’t adopted the technology cited security concerns as the reason why they hadn’t migrated to the cloud.
It is clear that the financial sector should be giving careful consideration to the security of cloud technology. When dealing with sensitive and personal customer information, a breach of data security could be disastrous to a banking organisation. Moreover, with historic attitudes to online security having been characterised by uncertainty, it is fathomable why the uptake of cloud technology has been a slow process for some financial corporations.
However, we have entered a new generation of the cloud, one which, instead of risking data being compromised, can actually improve the security level of data when implemented correctly.
The advanced use of encryption techniques to ensure secure communications between servers and browsers, tokenisation for extra sensitive data and violation detection software, all contribute to creating the cloud’s ultra-secure network. The cloud can also serve as a guard against physical attacks, as the lack of proximity of the server itself means that risk is neutralised.
The automatic and secure backup of data that the cloud offers is also of huge benefit to the financial industry, meaning compliance requirements are being met for the strict regulations enforced in the sector. Data can be easily recovered from an offsite location, ensuring business continuity and a rapid return to operations, should any disaster occur within the business.
Cloud computing continues to evolve and will further develop the revolution that we have seen in recent years as the sector adapts its business models, as confidence builds in the technology and as outputs and cost savings continue. Financial bodies can use the cloud for unlimited business benefits. Nonetheless, they should ensure that they have a clear vision of what they want from the cloud and devise a forward-thinking strategy to ensure maximum output from the technology.
Steven Boyle is the chief executive and founder of Integrated Cloud Solutions.
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Integrated Cloud Solutions