Cloud computing in banking

Financial Technology or FinTech has already started the transformation process in the banking industry. We are all going to see the ushering of a new age in banking. FinTech can be credited for the fundamental shift that is happening in the financial services sector, including banks. Technological innovations and already existing technologies such as Voice, Data, Artificial Intelligence, and Cloud Computing will lead the changes in the banking sector. Banks are moving towards digitization, and there is a lot of potential for collaboration between Fintech and Banks.

Cloud Computing Technologies

Everyone has realized the massive potential Cloud Computing has, and banks and other financial institutions are migrating to it. It offers numerous benefits and great storage options. The three major cloud computing services are:

• SaaS (Software as a service): delivering applications over the internet
• PaaS (Platform as a service): use the environment to develop, deliver, and manage applications
• IaaS (Infrastructure as a service): using IT infrastructure, operating systems, and data storage

 Banking and FinTech

The technological advances and growth of Artificial Intelligence, machine learning, and cloud computing have contributed to the tremendous growth in both FinTech and banking sectors. This has allowed banks to change the way they interact with customers. Banks have become more proactive. By partnering with any PaaS, IaaS or SaaS development company, which uses secure cloud solutions, banks can give a better user experience and automate their work.

Benefits of Cloud computing in banking

As banks realize the importance of the cloud, they are making a move towards it. The main benefits of this are:

Better data security

A data breach is a big problem for banks and can cost them millions of dollars. Cloud technology provides better options for safeguarding data. Banks need to choose the right FinTech partners who have the right credentials.

Lower Infrastructure costs

Every time banks expand or make organizational changes; they need to change their infrastructure, hiring and need time to execute it all. With the right FinTech support backed by cloud services, banks can move fast and make changes manageable.

More efficiency

The efficiency of a bank increases highly when it uses cloud computing. They end up having better:

• Quality control
• Loss prevention
• Flexibility
• Sustainability
• Disaster recovery

Both customers and banks will experience better transaction speeds with easier processes.

Banks and FinTech Partnership

Today, all banks are trying to engage with FinTech in different ways to keep up with the customer expectations and their competitors. Some are able to taste success, while some banks are still struggling to find the best way to use FinTech. The banks need to be clear about how best to engage with FinTech companies to unleash the potential truly.

PaaS & SaaS Vs BaaS

You know about SaaS and PaaS, but what about BaaS? Banking as a service is a new concept. It provides more transparency by letting banks open their APIs to third-party to develop more services. The bigger banks feel this way they can stop the encroachment by FinTech companies into their domain. In the BaaS model, a Fintech company, a digital bank, or any third-party provider pays a fee to access the BaaS platform. The bank opens its API (Application Programming Interface) to the outside parties and builds new banking products. This gives banks more control over the Fintech companies and other third-party providers and also opens a revenue stream for them.

SaaS in Banking

Banks are learning from the success of Fintech companies and incorporating SaaS in their systems. However, banks must choose the SaaS vendors after a lot of scrutiny due to the regulatory demands that govern the banking sector. Initially, the Fintech companies acted more as disruptors for the banking and financial sector. Now, these two are learning to work together. The biggest advantages of SaaS in banking are:

• Agility during volatile business cycles
• Cost reduction and better cost predictions
• Better data analysis for growth of business
• Automated security and control features
• Assurance of continuity with data backups

PaaS in Banking

Customers always want convenience, while banking banks find it difficult to meet their demand and safeguard the information. PaaS is a utility-based platform and allows users to develop, run, and manage applications. The main benefits of PaaS in the banking and financial sector are:

• Developers can quickly access several tools and innovations, thereby reducing the time in creating new applications and improving customer experience.
• As the bank expands, there is a need to serve the growing database. PaaS allows easy scalability with customized applications.

 Conclusion

Cloud services are becoming a high priority for banks because the benefits are many. Cloud computing can make the functioning of banks better and smoother. They can work at a higher level of efficiency. The faster banks embrace the new technologies and use them to their advantage, the better it is for them and the customers.