# The future of financial services is in the cloud
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-06-23
Category: TECHNOLOGY
Category URL: https://financedigest.com/category/technology
Meta Title: Unlocking the Potential of Cloud Technology in Financial Services
Meta Description: Learn how cloud technology is transforming the financial sector, from enhanced security to personalised services, and why it's crucial for banks to adopt
URL: https://financedigest.com/the-future-of-financial-services-is-in-the-cloudhtml

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_By **Rajasekar Sukumar,**_ _Vice President Europe_ _, Persistent Systems_

Once a land of physical cheques and paper paying-in books, the banking landscape has changed rapidly in the last decade, with a digital-first approach becoming the norm. But with increasing digitisation comes an increasing reliance on technology.

The sheer volume of data that needs to be processed, analysed and stored in the [financial sector is putting pressure on established banks and financial services](https://www.financedigest.com/can-financial-services-brands-ever-be-credible-on-social.html "Can financial services brands ever be credible on social? ") organisations.

As monolithic legacy systems struggle to keep up, [financial services](https://www.financedigest.com/as-hackers-declare-cyberwarfare-financial-services-cannot-afford-to-be-complacent.html "As hackers declare cyberwarfare, financial services cannot afford to be complacent") organisations are increasingly turning to cloud and SaaS based technologies, investing large amounts of money, in order to unify their core systems, speed up operational workflows and better manage data. But although the progression is there and cloud tech is becoming a prominent feature in the [financial services landscape](https://www.financedigest.com/trends-in-the-financial-service-landscape-and-the-impact-on-fraud.html "Trends in the financial service landscape and the impact on fraud"), the question that now needs to be asked is: is it being leveraged in the right way?

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Rajasekar Sukumar, Vice President Europe, Persistent Systems

**The benefits of** [cloud technology](https://www.financedigest.com/7-ways-cloud-technology-can-transform-business-finances.html "7 ways cloud technology can transform business finances")

The [benefits of the cloud](https://www.financedigest.com/the-benefits-of-adopting-cloud-technology-in-the-finance-industry.html "The benefits of adopting cloud technology in the finance industry") have been talked about generically for more than a decade. The headline advantages aren’t new and can apply to any organisation in any sector: no [limitations on data storage](https://www.financedigest.com/ransomware-storage-and-backup-techniques-and-limits.html "Ransomware, storage, and backup: techniques and limits") capacity, the ability to scale quickly, eradication of maintenance by in-house IT teams and moving from CapEx to OpEx.

Yet cloud systems have evolved significantly in recent years and in [financial services](https://www.financedigest.com/what-can-we-learn-from-financial-services-security.html "What can we Learn from Financial Services Security?") we see some key areas where the cloud specifically comes into its own.

The [cloud is increasingly becoming the solution to some of banking’s](https://www.financedigest.com/why-finance-professionals-must-bank-on-a-journey-to-the-cloud.html "Why finance professionals must bank on a journey to the cloud") biggest operational challenges — managing and unifying their processes, while keeping them adaptable to future change.

Take security for one. The acceleration of cyberattacks in recent years, coupled with the fact that banks [hold and process extremely sensitive data](https://www.financedigest.com/sterling-holds-firm-after-uk-jobs-data-muddies-rate-outlook.html "Sterling holds firm after UK jobs data muddies rate outlook"), make this essential. There’s a misconception that cloud systems are vulnerable to hackers, but the truth is actually the opposite.

Cloud-based systems have security protocols and various levels of authentication built directly into their systems. The files stored on cloud servers are also encrypted making it harder for cybercriminals to access the information through the scrambled signal.

Governance, risk management and compliance (GRC) is another area that goes hand in hand with [data security](https://www.financedigest.com/assurance-v-security-reassessing-responsibility-for-data-assurance.html "Assurance v Security: Reassessing Responsibility for Data Assurance"). In such a highly regulated sector, banks and [financial services](https://www.financedigest.com/boom-or-bust-how-the-financial-services-sector-is-coping.html " Boom or Bust: how the financial services sector is coping") firms need agile systems where information flows seamlessly for faster and more accurate data management and reporting. In turn, this makes it easier for [financial services](https://www.financedigest.com/how-big-data-is-sending-shockwaves-through-the-financial-services-sector.html "How big data is sending shockwaves through the financial services sector") providers to stay compliant with strict industry regulations.

Personalisation is a key [benefit of a cloud-based infrastructure and one that is becoming increasingly](https://www.financedigest.com/benefits-of-increasing-blog-traffic-with-guest-blogging-and-posting-service.html "Benefits of Increasing Blog Traffic With Guest Blogging and Posting Service") important to differentiate and compete. Digital-first banks, built on the cloud, use this advantage to accelerate the development and launch of products and [services for niche customer sets](https://www.financedigest.com/italys-eni-sets-up-sustainable-transport-services-company.html "Italy’s Eni sets up sustainable transport services company").

In contrast, some larger banks are hindered by [legacy systems](https://www.financedigest.com/retailers-weighed-down-by-their-own-legacy-systems-survey-reveals.html "Retailers Weighed Down by their own Legacy Systems, survey reveals") that were designed to attract a large client base. Targeting specific [groups with personalised offerings](https://www.financedigest.com/leading-financial-advisory-group-bolster-offering-with-senior-appointment.html "Leading financial advisory group bolster offering with senior appointment") across such an extensive number of customers is a gigantean task.

Cloud-based technology is helping some to [overcome this challenge](https://www.financedigest.com/disadvantages-key-challenges-to-overcome-when-working-from-home.html "Disadvantages – key challenges to overcome when working from home"), bringing the agility to launch smaller banking entities or spin-off brands for specific demographic groups, separate from the main banking eco-system. It’s an approach that has allowed them to be competitive in an increasingly crowded [digital first banking](https://www.financedigest.com/what-banks-need-to-do-right-now-to-improve-their-digital-services-without-sacrificing-security.html "What Banks Need to Do Right Now to Improve Their Digital Services Without Sacrificing Security ") landscape.

But while all these benefits can be appreciated on their own, it’s only when you utilise what we at Persistent Systems call a [digital mosaic architecture that financial services](https://www.financedigest.com/the-future-for-financial-services-is-digital-engagement.html "The future for financial services is digital engagement") organisations can see the full benefit of a cloud infrastructure.

**The cloud-driven digital mosaic**

If established banking brands want to stay competitive, they need to embrace cloud as the corner stone of their [digital transformation](https://www.financedigest.com/how-digital-is-transforming-finance-in-2023.html "How Digital Is Transforming Finance in 2023") efforts. In doing so, they can create a digital mosaic architecture, where they cherry pick a unique, powerful combination of best-of-breed cloud-based [services and applications that the bank needs](https://www.financedigest.com/do-you-need-to-buy-guest-post-services-why.html " Do You Need to Buy Guest Post Services? why?") for its unique proposition, whether that’s current accounts, investment portfolios or credit decisioning.

If we take Formula 1 as an example, years ago when drivers would pull into the pit there would be just a couple of people there to perform all the necessary tasks. They would need to change tyres, refuel, wipe the visor, make repairs and more, but a slow pit stop was often the difference between winning and losing out on the track.

Now, a pit stop has a team of 20 people or more, all with a specific task that they specialise in. This culmination of expertise results in quicker times, better efficiency and a much higher chance of the driver [winning the race](https://www.financedigest.com/winning-the-security-race-how-financial-services-can-keep-pace-with-cybercriminals.html "Winning the security race: how financial services can keep pace with cybercriminals").

Through the digital mosaic model, [banks have this same flexibility to add and integrate the right services](https://www.financedigest.com/britain-seeks-to-boost-banking-services-from-fintechs.html "Britain seeks to boost banking services from fintechs"), applications and data platforms to meet the specific needs of a particular customer group for a hyper-personalised approach, without having to invest in or manage any technology they don’t need.

For established players, this is the best [way to leverage cloud](https://www.financedigest.com/green-cloud-one-way-your-company-can-commit-to-sustainability.html "Green Cloud: one way your company can commit to sustainability") infrastructure, whether they are just starting to use the cloud or are building on the cloud services they already have. For digital-first [banks it’s the way to create their whole proposition](https://www.financedigest.com/rethinking-retail-banking-embracing-a-customer-centricvalue-proposition.html "Rethinking retail banking: Embracing a customer-centricvalue proposition") from the ground up. For both, it removes a dependency on complex, legacy IT infrastructures and offers instead a highly agile, flexible banking architecture.

**The [digital transformation](https://www.financedigest.com/making-sure-that-finservs-digital-transformation-doesnt-mean-digital-exclusion.html "Making sure that FinServ’s digital transformation doesn’t mean digital exclusion") race is on**

As market competition heats up and the customer appetite for simplicity, convenience and personalisation increases, [embracing the cloud](https://www.financedigest.com/embracing-cloud-computing-how-and-why-organisations-are-set-to-invest-more-in-cloud-computing-in-2023.html "Embracing Cloud Computing: How and why organisations are set to invest more in cloud computing in 2023") remains essential, but leveraging the cloud in the right way is how banks will keep ahead of the curve.

If [banks can’t change](https://www.financedigest.com/climate-change-fight-a-core-duty-for-central-banks-ecbs-villeroy.html "Climate change fight a ‘core duty’ for central banks – ECB’s Villeroy") as rapidly as the market, then piece by piece they will lose market share as challenger brands attract their customers and convince them to switch providers. It’s a pace of change that will only continue to accelerate as younger and more digitally-minded generations become both [customers and workers in the financial services sector](https://www.financedigest.com/revolutionising-customer-service-three-sectors-that-are-leading-the-way.html "Revolutionising Customer Service: Three sectors that are leading the way…"), all focused on innovating and driving change.

A cloud-based digital mosaic architecture offers the ideal [technology environment to address these imperatives with speed](https://www.financedigest.com/nvidia-unveils-latest-chips-technology-to-speed-up-ai-computing.html "Nvidia unveils latest chips, technology to speed up AI computing") and flexibility.


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