From data storage to advanced security options, cloud-based technology systems deliver several important advantages to banks
In its most simple form, ‘cloud banking’ refers to the use of hardware (for storage) and software (for the service) to save and access data. This technology has proven to be a great ally in information managementby providing capacity and security, especially for banks. In addition, it allows financial services to be rolled out more quickly and with less expense – all while increasing its flexibility to adapt to the market needs.
The first cloud technology providers joined the market 10 years ago. Today, the industry has matured and is growing fast in a range of business sectors, which is why it provides an automated offer that is customer-centric.
In Europe, for instance, 63% of investment banks are using cloud computing, a 33% increase compared to 2018, according to a report by The Association for Financial Markets in Europe (AFME). By being immersed in a highly competitive framework, it has become necessary to invest in simpler and swifter solutions.
Moreover, there is a series of key areas that are motivating leaders of financial institutions to migrate to the cloud, such as synchronization of business areas, promoting business innovation and improving the security of technological environments.
After the increase in cybercrime in 2020 - and the urgent need to invest in more robust infrastructures - financial institutions are exploring technologies that allow them to store and process data without any vulnerabilities in the way.
The COVID-19 pandemic sped up this change. In fact, forecasts suggest that the cloud security solutions market in the banking sector will grow by more than 33% per year between 2021 and 2026, according to the market research company Mordor Intelligence.
The study found that it is the emergence of new threats to cybersecurity that is leading banks to implement cloud solutions. Moreover, with the increase in phishing, the need for security has become even more important, as malicious emails can come from real bank addresses.
Under this context, cloud computing offers a high level of data protection, especially for sensitive information, such as customer details. The most important insight when it comes to implementing robust architecture is to invest in the technology and the strategies that make it possible to pre-empt vulnerabilities - rather than scrambling for a fix when something goes wrong.
Investing in cloud banking has now become a race for data protection, but also for business reputation. Remember that, for cybercriminals, data can be a bank’s most valuable asset, which is why the security that protects it is fundamental.
Banking industry trends towards the adoption of cloud technology can give us an idea of the advantages that technology innovation leaders are hoping to secure for their businesses.
Banking leaders are increasingly recognizing that the cloud is more than a technology. It is a space where financial service businesses can store data and applications and have more enhanced network security, especially in an age when customers are more aware than ever of privacy.
Cloud providers, for their part, are also offering a great opportunity to optimize operations, such as suspending the operation of data silos due to risks, costs, and regulations.
In summary, there are several benefits that have led the cloud to have a privileged position in the processes of digital transformation in banking. Despite this, migration processes are not as simple as reading this text.
It will be necessary to develop a strategy that makes it possible to explore and exploit each of the benefits and design a road map and collaboration so these benefits can be achieved.
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