You could argue that innovation in the payments and financial technology business moves at the speed of the cloud. However, comprehending its full potential and leveraging it effectively requires continuous learning and understanding. This compilation of resources provides a deep dive into the intricacies of cloud computing, ensuring that you're equipped with knowledge and poised to harness the cloud's transformative power for banking and other business verticals.
Let’s start with a guide to the basics. Salesforce does an excellent job of laying out the benefits and best practices, from cost savings to sustainability. A good primer for the team member who needs a starter pack on migrating to the cloud. Key quote: “There are few things as detrimental to the success of a business as poor quality and inconsistent reporting. In a cloud-based system, all documents are stored in one place and in a single format. With everyone accessing the same information, you can maintain consistency in data, avoid human error, and have a clear record of any revisions or updates. Conversely, managing information in silos can lead to employees accidentally saving different versions of documents, which leads to confusion and diluted data.”
Don’t move away from the basics without checking out one of the major cloud providers like Microsoft, Snowflake, Google, IBM or Oracle. All have excellent content ranging from the basics to developer level. This piece from Amazon Web Services (AWS) fits somewhere in the middle and makes a comprehensive business case for the cloud at multiple levels. Key quote: “Leverage cloud to develop new, and improve existing, processes, products, and experiences. By enabling you to instantly provision and shut down resources, cloud can help you reduce your time-to-value and innovation-related cost and risk. To fully take advantage of the potential for increased business agility that comes with cloud adoption, develop an innovation strategy that includes a mix of incremental innovation initiatives focused on optimizing your existing products, processes, and experiences, as well as disruptive innovation initiatives focused on enabling new business models. Create mechanisms for soliciting and selecting ideas in line with your strategic priorities and develop an end-to-end process for scaling successful innovation pilots.”
Moving right along to the intersection of the cloud and banking, this McKinsey report goes beyond the basics. It lays out the business case for migrating to the cloud for financial institutions. Said migration, this report says, is urgent for competition and can unlock billions in hidden revenue opportunities. Key quote: “One leading payments company initially struggled to make much progress on its cloud aspirations because it was limited to an “IT initiative.” That changed when it needed to integrate a major acquisition. Successful integration required closer collaboration between the business and technology groups, which allowed the company to shift its cloud strategy to a top business priority, a significant unlock. In addition, the deal enabled the company to pilot new products on cloud as well as to modernize its IT’s core transaction-processing system. The company has since mandated that all new development will occur only in the cloud platform.”
This “state-of-play” report surveyed senior banking professionals across Asia Pacific (APAC), EMEA and North America, tracking how far banks have come in their cloud transition journeys. Among other data points, the survey revealed that only 28% of banks have migrated more than 30% of their applications to the cloud. Key quote: “The findings revealed that many retail and commercial banks have big ambitions to increase the number of applications and data that are hosted in the cloud, signaling a major acceleration compared with their pace of adoption over recent years. Taking all regions surveyed together, over two-thirds of banks want at least 30% of their applications and data to be in the cloud in three years’ time (close to triple the number of banks who have achieved that today); however, North American banks are the least ambitious on cloud adoption, with only 29% of banks in the region wanting their customer-facing apps in the cloud within three years.”
Migrating to the cloud and putting financial services to work within it has its challenges. That’s the strength of this report from Security Boulevard. Yes, it joins the other entries in singing the praises of the cloud. But it also details some of the major challenges and thinking behind staying with a level of legacy infrastructure. Key quote: “A number of the financial industry rules that banks must abide by specify precise protocols for handling consumer data. If their systems are housed on the cloud, banks can find it challenging to adhere to all of these rules. The financial services industry has been less willing than other industries to adopt cloud-based solutions due to concerns about resilience, data integrity, security, and risk management. However, the use of the cloud in other industries has demonstrated its advantages. Cloud-based systems offer more flexibility, scalability, automation, cost savings, and collaboration. Organizations with different and separate systems can access a shared platform using cloud-based solutions to share, exchange, and analyze data quickly, effectively, securely, and robustly.”
The cloud has a part to play in fraud prevention. This piece, from software delivery specialist Semaphore, rates that prevention capacity as “off the charts” but goes on to analyze the vulnerabilities as well as the strengths. It also does a nice job covering the cloud from small businesses to large enterprises. Key quote: “Hackers and malicious third parties are not responsible for all frauds. Sometimes, this fraudulent behavior comes from people you’re doing business with. They’re not doing it under a false identity; no hackers are involved. Either your buyer or the business you’re buying from is defrauding you. Simply put, it’s fraud committed by one of the parties in a transaction, and it often looks like a mistake. A client makes an order for an item and later files a claim that they didn’t make an order or that someone stole their credit card. It’s an opportunist behavior that’s hard to prove.”
Oracle’s report on fraud in the cloud goes another level above Semaphore’s by adding research on insider threats, average number of applications run by cloud-based companies and the intersection of the cloud and remote work. For example, 27% of the report’s respondents rate remote work as their biggest challenge. Key quote: “Many organizations have not adapted their application controls and identity and access management programs for the cloud such that they have overprivileged accounts and lack user monitoring to detect anomalous and potentially fraudulent activity. In fact, the top type of misconfigured cloud service, reported by 37% of our research respondents, is overprivileged accounts.”
AI is everywhere, and it has a significant role to play in cloud computing. In fact, as this report from hybrid cloud provider Nutanix shows, 70% of companies get their AI capabilities through cloud-based software, while 65% create AI applications using cloud services. Key quote: “AI and cloud computing converge in automating processes such as data analysis, data management, security, and decision-making. The ability of AI to exercise machine learning and to derive impartial interpretations of data-driven insights fuels efficiency in these processes and can lead to significant cost savings on numerous fronts within the enterprise.”
The flagship research initiative from Bottomline shows 1,600 respondents from companies in Great Britain and the United States putting the cloud and subscription-based pricing front and center in the post-pandemic financial environment. Access to the cloud figured prominently in the findings from both countries followed by mobile payments, fraud prevention and AI and predictive analytics. Key quote: "Cloud-based solutions provide the architecture to free up internal capacity, ditch legacy on-premise solutions, accelerate the move to digital payments, reduce costs, and enable new types of payments. Combined with enriched data from ISO 20022 messaging formats and the ability to accommodate cross-border payments in real time, a more agile and robust payment environment can be created, making it easier for banks and businesses to connect.”
Cloud computing is loaded with developers, engineers and expert executives that live and breathe their work. If we had to pick three to follow, we would start with Microsoft’s senior product manager Vanessa Alvarez who mixes her observations on business with advice on what it takes to be successful. As one of her recent posts reads: “You can be the smartest in the room, but if you don’t have the determination to keep going whatever comes your way, starting a company is not for you. And that’s ok.” Next, check out Vice President & Chief Evangelist at Amazon Web Services Jeff Barr, who has been on the AWS case for more than 20 years. And finally, SoftwareOne global practice director Gordon Davey for an engineer’s view of the fine details of the cloud.