Isn’t it surprising to know that 70 percent of financial institutions are just now adopting cloud computing solutions? Or how about this fact: over 90 percent of the world’s top 100 banks still use physical mainframes running 20th century style. So, what’s holding up the upgrades?
It’s that old devil, legacy, and a smidgen of caveat emptor on the part of upgrading banks. But known unknowns aside, this is not the economic climate in which to do business without agile, resilient cloud computing at your beck.
That point is driven home with numerous examples in PYMNTS’ latest Digital Banks And The Power Of The Cloud Tracker® done in collaboration with NuoDB. The new Tracker provides a detailed map of the cloud computing terrain for financial institutions (FIs), and the competitive urgency it creates.
“Challengers such as Monzo and Revolut have turned to the cloud to support core banking services, and many FinTechs and digital- or mobile-only banks are following their lead,” the report states. “Legacy banks must examine how to best adopt or develop cloud solutions of their own to provide that same nimble customer support during a time when customers are going digital first and branch second.”
The End Of ‘The Data Hunt’
Noting recent cloud moves by the likes of asset management titan Blackrock and French concern BNP Paribas, the stakes could not be higher for legacy financial institutions.
“BNP Paribas believes that building out a private cloud will allow it to focus more heavily on its plans for online banking innovation,” the Tracker states. “It will also enable it to provide faster support for its existing services as it will be able to more easily access information that is stored on the cloud as opposed to hunting for this data across its mainframes.”
The dreaded “data hunt” is becoming a thing of the past as more FIs step up to test and learn cloud computing and its manifold advantages. For its part, Blackrock went with Microsoft Azure for scale, and to drive innovation — tasks for which cloud computing is seen as ideal.
Other new partnerships are showing the range of possibilities cloud computing offers FIs. The recent pact between Temenos and NuoDB is one example.
“Banking software company Temenos together with SQL database company NuoDB are offering such tools tailored to challenger banks’ specific needs,” the Tracker states. “The two have partnered to provide Temenos’ software to these FIs on the cloud, including products that allow challengers to quickly answer customers’ queries. Such solutions can also cut down on infrastructure costs for challenger banks, enabling them to turn their funds toward the continued development of more innovative digital solutions.”
Flexibility and agility. With cloud computing for FIs these concepts take on weightier meaning, as legacy computing is the bane of a financial ecosystem trying to break physical bonds.
“[Agility] is incredibly important for companies when it comes to responding appropriately to black swan events,” Ariff Kassam, chief technology officer for cloud and distributed SQL database company NuoDB recently told PYMNTS.
“Business processes and technical infrastructure must be agile enough to ensure a quick response to changing requirements. An agile infrastructure allows companies to accommodate surges or reductions in demand. A firm’s connected ecosystem should enable this agility, which means choosing technology partners that support it.”