It’s no secret that there are many businesses and organizations that can benefit from cloud technology. Lots of companies have already made the switch, but there are some legacy banking systems that still haven’t migrated to cloud technology yet. The pandemic has also changed expectations regarding flexibility, banking, and compliance. Financial institutions already understand that technology can disrupt the sector in the long-term, but many are still resisting moving to cloud technology, despite its known benefits.
Technology has changed the financial sector forever, and that’s one of the reasons why banking legacy systems should consider leveraging cloud technology to their advantage. Cloud technology can not only make your operations more efficient, it can actually protect financial data more than ever before. Here are some reasons why more financial institutions should move on from their legacy systems and consider utilizing cloud technology.
Cybersecurity
There’s no denying the fact that cybersecurity is one of the most important issues in the financial sector today. No financial institution wants to have to deal with the financial loss and reputational damage associated with a data breach or a cyberattack of any kind. Cloud technology can help ensure that your financial consumer information is safe and encrypted.
Of course, decisions must be made regarding which employees have access to what information. The financial institutions must also ensure that employees understand cybersecurity best practices. Cloud technology can also make it much more efficient to deal with the constant regulatory updates in the financial sector.
The fact that data can be encrypted in the cloud is an excellent advantage. The average data breach costs businesses millions of dollars, and it can definitely change the way that a consumer perceives a financial institution.
Innovation
One of the reasons that financial institutions are having trouble on legacy systems is due to the fact that the rise of fintech has been so successful. More individuals and businesses are using innovative fintech solutions for their banking needs, and cloud technology can allow for more innovation.
Cloud technology could provide the foundation for AI-based platforms that could help generate massive amounts of profit and revenue. Cloud technology has already been integral when it comes to cross-border transactions, and there is no doubt that cloud will be crucial to the future of finance.
Cuts Down on Costs
There are many legacy banking systems like Murex that are relying on 24/7 monitoring and may have even needed to rent out more office space to accommodate for their IT staff. With cloud technology, financial institutions can lower their overhead considerably. Cloud technology also allows for systems to be updated regularly and remotely, which helps overall efficiency.
Of course during a pandemic, cloud technology is even more important since it allows for remote updating rather than an actual IT team coming in for an update. This helps financial institutions and organizations remain safer than ever before in the wake of COVID-19.
Digital Transformation
Financial institutions might appreciate their legacy systems, but some have been avoiding the digital transformation for a long time. For finance to progress, these institutions will have to eventually turn to cloud-based solutions to ensure that they remain competitive in modern markets.
At the end of the day, migrating to the cloud is simply one way that a financial institution will need to “keep up with the times.” Many businesses are learning to automate manual processes and finding that it improves productivity significantly.
Of course, this will require some important decisions on the part of the financial institution. Can every aspect of the legacy banking system be migrated, and what aspects of the system cannot be migrated? Will these features be left behind, or will they be easily rebuilt? Some financial institutions will have to make important decisions regarding what to migrate to the cloud, and why.
Scalability
One of the reasons why cloud technology is so important is that it allows financial institutions to scale quicker than ever before. Now, financial institutions can upgrade and downgrade requirements when needed, and cloud can allow for more rapid growth than usual. Cloud technology also allows for more storage than ever before. Cloud technology can also dramatically improve reporting, which can lead to key insights that can drive future revenue.
Without cloud technology, you will need to constantly update your hardware and software to the point where it can affect productivity. Cloud technology can save time and money when it comes to adjusting for financial consumer needs, and it can help when it comes to delivering on customer expectations.
Written by Paul Morris, North America sales manager at CPQi. Want to chat to Paul about digital transformation or cloud migration? Send us an email or message him on LinkedIn.
