Why should banks join the cloud?

Dhanum Nursigadoo
5min read

Henry Ford owned the plants that manufactured rubber, glass, and steel to build the Ford Model T. Now car companies have a network of specialist suppliers of glass, rubber, and other key parts. These suppliers are better at building glass or rubber than the car companies themselves.

You know that Henry Ford’s business model is no longer viable; that’s why you subcontract for multiple pain points in the industry. Why focus on developing all your own security when you can outsource it to specialists?

People feel secure if they can look at the server where their customer’s data is stored. If they can see the fences, the barbed wire and security, they feel secure. The irony is that as good as bank security is, it’s far from the best in the world. This is the main driver for the rise in cloud services. Banking has taken a few major hits in the press and just by existing your bank is 300 times more likely to suffer a hit to security. There shouldn’t be any reason for you to fall prey to the same errors as others. So why do companies try to carry the world on their shoulders when it comes to cybersecurity and cyber risk? High profile data leaks are becoming more prevalent, increase your security with a cloud provider and add a new dimension to your customer data protection. Rely on specialists working on an industry-wide scale, putting in continuous security investment and research, such as Microsoft Azure, and be more secure. Since the financial crisis, costs have been arguably the key battleground in banking. 89% of industry executives expect that keeping up with increasing compliance regulations is going to result in growing costs. How can you deliver ever cheaper and ever more secure services and truly digital world class solutions to your customers?

Mind the Service Gap

Customer expectations have been set very high by consumer tech (e.g. Instagram, Spotify) and the experience offered by most financial services companies cannot keep pace. Trying to deliver at the pace of consumer internet when you have a legacy technology stack that cannot keep pace is nigh-on impossible. There has been a dramatic rise of fintech companies solving niche needs, but how do you take advantage of these specialists if you can’t integrate or work with them inside of a monolithic organisation? Delivering truly digital services that help you get across the page is not easy. Part of that solution is finding a way to alter your base architecture to be more reactive to customer needs, security, and compliance. Your data centre is key to how you do your work. Building it out with cloud-based services that work alongside your existing capabilities allows you to supercharge your current tech stack and adds a layer of intelligent security:
  • Depending on legacy systems can be costly and hamper agility
  • Work with a layer of cloud
A faster and more effective solution is to partner with a cloud-based system that can provide you with agility, adaptivity, and expertise. This allows you to focus on solving the customer problem (or Jobs to be Done) rather than managing data centres, cyber risk and software updates. In 2013, when businesses moved to the cloud it was for ease of use and to cut costs. It turns out that having someone else take care of laying the groundwork means you can focus on delivering a loveable product, closing the service gap, and getting across the page. However, these benefits, while still relevant, aren’t always the driving reason behind moving to the cloud. In a world with data breaches making headlines every few weeks and dominating the news cycle, you know you need to improve security and compliance. Just remember that the cloud needs to work for you, and there are a few requirements vital in orchestrating a client-cloud relationship that works for you. Make sure you can stay agile to solve issues that crop up. Security is integral to your business so it’s necessary to have defences that adapt to your needs. And finally, just make sure you choose a cloud who know the industry, one that's packed with experts that understand your needs. With a service that enables you to have all of these, you’re certain to shore up any weaknesses your consultants have warned you about.

Global Security and Compliance

General Data Protection Regulation (GDPR) is the latest and most impactful in a line of data protection regulations to affect companies; you obviously know that already from our Dirty Data podcast! 60% of tech companies simply weren’t ready for GDPR and many still aren’t compliant. Cloud technology is useful for financial services firms here as well. Compliance is a major and known issue for a good cloud provider; regulatory issues are seen in advance through tight-knit relationships with global regulators and adapted to before banks can even start research. It’s all about focus. Double down on what you’re great at, and remove the barriers that stop you from delivering great service. You need to stay ahead of the curve. Cloud technology means you can get ahead of regulation and competitors.

Upgrade Your Thinking

Security and compliance doesn’t immediately bring to mind speeding up processes or bettering services in any way other than being more secure. Cloud computing changes that. Someone just made compliance easier for you (woohoo!) It is surprising then that often people worry about “the cloud” being not secure...

Trust in the Cloud

The truth is, the cloud is more secure than the data centre you’ve got hidden behind your barbed wire and fences. It has specialised and dedicated teams for security that are much better than what you can do. Get your bank on the most compliant cloud available and the only consistent hybrid cloud out there and you won’t even need to think about security. Instead you can focus on your customers. Digital banking is only 1% finished, without having to worry about security you can focus on the next 99%. Join the cloud. Don’t forget to follow @Azure @IndustryXp and @msftfinserv on Twitter to stay up to date with all the latest news from the Azure team. Keep an eye out for even more blog posts in association with Microsoft Azure (and maybe even a podcast) very soon!