The words “fast”, “affordable”, and “hassle-free” are seldom used in conjunction with financial products. However, broader trends are revolutionising how companies deliver new experiences and engage with customers across the industry.
Today’s business differentiators, such as the use of chatbots to automate interactions with customers, are possible due to the advances in technology provided by cloud. By reducing barriers to innovation such as cost, time-to-market, and security, the cloud is enabling financial services providers to rethink — and transform the way the industry works, and the value that it provides.
The accelerants driving the industry’s transformation are the proliferation of mobile devices for the completion of tasks that were previously driven by human-to-human interactions, changing consumer preferences based on generational demographics, and continually evolving regulatory environments.
In response, established financial services providers are facing urgent pressure to adapt their business models, organisational structures, and technology infrastructure to innovate with agility while their fintech challengers grapple with common start-up issues including scalability and capital constraints. The current shift underway to cloud as the “new normal” for technology deployments for financial applications is levelling the playing field for financial services organisations of all sizes as they rush to meet the challenges and opportunities that exist in the market today.
Drive agile innovation
While large scale and significant size can provide advantages — including access to abundant customer data — they can also contribute to established organisations being less agile than newer market entrants. Established banks, insurers, and asset managers must balance their large scale with the need to react nimbly to market conditions and quickly address customer demands for faster, easier, and better services. Complicated legacy IT infrastructure and processes tend to isolate data in silos, leading organisations to miss opportunities to capitalise on data-led decision-making for trading, risk management, fraud surveillance, and even potential mergers and acquisitions.
Leveraging data effectively requires resources that many organisations, both large and small, cannot afford to maintain — namely, the capacity and tools needed to effectively and efficiently collect, store, and process massive amounts of data.
Using the cloud, organisations of all sizes can more easily and more effectively make evidence-based decisions regarding customer segmentation, pricing, product development, and cross-selling using analytics, visualisation, storage, and other management tools. The cloud also provides the tools companies need to develop applications and deliver new solutions to market at the speed demanded by today’s consumer.
Union Insurance, a leading UAE-based insurance company that provides a comprehensive range of retail and commercial insurance products, migrated its complete IT infrastructure and workload to the AWS Cloud. As a result, the Union Insurance team now spends more time on things that matter to their customers — creating and supplying world-class insurance products. Moreover, by migrating to AWS, Union Insurance saved more than 84 per cent of their IT infrastructure costs while accelerating time to market of new products and undertaking aggressive geographical expansion.
To accelerate its own digital transformation, the National Bank of Bahrain (NBB) recently announced the successful completion of the first phase of its cloud adoption with the migration of its website (nbbonline.com) to Amazon Web Services (AWS), with plans underway to migrate the bank’s intranet and online banking platform to the cloud. The move forms part of NBB’s strategic approach to cloud adoption and a broader digital transformation at the bank that aims to drive change, achieve greater operational efficiencies, and enhance customer satisfaction. By operating on AWS, NBB can greatly reduce time-to-market and ensure it is always moving at the fast-pace that customers require.
Meet complex compliance and regulatory requirements with ease
The cloud is providing the answer to many regulatory issues for both incumbent financial providers and fintech start-ups, as all require the most robust security and compliance capabilities to meet regulatory obligations, protect themselves from threat actors, and instill confidence in stakeholders.
Operating comprehensive governance, risk, and compliance programmes can pose a significant challenge to financial institutions due to the need to manage risk across business lines, global regulatory regimes, and large employee populations. By providing virtually unlimited computing and storage capacity and enabling integration of disparate data sources, the cloud can mitigate many of these issues. Moreover, extensive security certifications and accreditations, data encryption, and strong physical security all contribute to a more secure IT infrastructure, while automation decreases the chances of human error and saves time and capital.
The new normal
For both incumbents and fintechs, cloud is the new normal. The industry has evolved in the way it thinks about this technology, and cloud is now ingrained in daily business operations and is ushering in a new wave of innovative solutions from players of all sizes.
Today, the opportunities that exist in financial markets are no longer only available to large organisations with deep balance sheets who can afford capital-intensive projects; rather, the advent of cloud as the “new normal” in the industry has levelled the playing field for players of all sizes, enabling them to compete on the merits and value propositions of their products and services.
Vinod Krishnan, head of the Commercial Sector in the Middle East and North Africa at Amazon Web Services (AWS).
