Cloud computing is a technology that’s rapidly gaining traction among financial services institutions. While the industry had initially been slow to adopt such services, with concerns about regulatory requirements and security among the primary barriers to adoption, this is changing.
Indeed as the regulatory landscape grows clearer and professionals become more comfortable with the technology, there is growing recognition of the benefits of this technology. And not before time, as the rest of the world is rapidly approaching a tipping point where cloud is no longer an option, but the norm.
Forrester estimates that this year will see cloud computing pass the “magic threshold”, with more than half of global enterprises relying on the technology to drive their digital transformation, and financial services sector will be a part of this.
But cloud computing is far from a static technology, and the coming year is expected to see several new trends and applications emerge that will reshape how businesses interact with the technology. So what are some of these and how will they impact on the banking sector?
Software-as-a-Service to be a priority
While banks may view cloud technology as a means of upgrading their legacy infrastructure, it will be in software applications where much of the growth in cloud will come from in the coming years. Forrester noted, for instance, that key Software-as-a-Service (SaaS) vendors will look to expand and become “true platform providers” to make it easier to consume their software.
For banks, this could open up new opportunities to work with technology providers to overhaul their customer-facing systems to take advantage of the latest developments, using the power of the cloud to develop new solutions more quickly and flexibly than in the past.
Internet of Things to become a key consideration
The Internet of Things (IoT), sometimes also referred to as the Internet of Everything (IoE) was one of the most-hyped technologies of 2017, and it’s one that often relies on cloud resources in order to gather, store and analyse the data the new generation of sensors create.
Network World stated recently: “Continuous innovations in real-time data analytics and cloud computing are set to push the IoE to the fore in 2018 … Cloud computing will play a significant role as the IoE develops into complex systems aimed at simplifying all interactions.”
In the banking sector, key applications for IoT include studying individual customer data from sensors and mobile devices to develop more personalized services, or leveraging wearables and smart home devices to expand the range of services they offer.
Taking advantage of artificial intelligence
Another area that is set to benefit from the scale and resource power provided by the cloud is artificial intelligence (AI). This was recently described by one executive as the ‘killer app’ that will drive cloud computing to the next level this year and beyond, and many cloud providers are stepping up their AI offerings. Bernie Trudel, chairman of the Asia Cloud Computing Association, noted that Amazon Web Services, for instance, offers a range of AI-based tools for natural language processing, text-to-speech processing and image recognition and facial analysis that may be particularly useful for the financial services industry.
For instance, the rise of robo-banking and chatbots mean that demand for AI tools that understand and interpret human language will be important for many financial services tools, while facial recognition biometrics are also gaining interest, with the likes of Apple embracing this technology in its iPhone X.
These are the sort of capabilities it will be difficult for banks to develop on their own, so taking advantage of cloud-based resources will often be the key to success when implementing the innovative technologies today’s customers expect.