While other industries have raced ahead in their digital transformation efforts, the banking industry has lagged behind. Whatever the reason for this lag has been, there is good news: Today, banks are generally receptive to cloud-based core banking, with 29 percent saying they would consider it, according to a survey from the American Bankers Association.
The Cloud is key to digital transformation in any industry, but especially so in banking, where security, risk management, and IT services need the state-of-the-art features the Cloud can offer. Here are our top 12 cloud solutions that make all the difference to commercial banking institutions.
For IT Services and Functions: ServiceNow
With IT increasingly important in banking’s digital transformation, a solution like ServiceNow’s IT Service Management (ITSM) platform helps make the transformation successful. ITSM streamlines all IT-related services and functions so that they can be found in one place and one system. Additionally, it allows banks to engage their customers with natural, human conversation that puts customers at ease and can help provide memorable service.
For Public Clouds: Microsoft Office 365
Financial institutions continue to express reluctance over outsourcing their core banking and most of their mission-critical systems to the Cloud. This is especially true for “the public cloud, where there have been damaging and highly publicized security breaches,” says Shacklett. “However, that doesn't mean that financial services companies aren't investing in public cloud solutions.”
One popular option is Microsoft Office 365. Banks like this solution because it encourages employee collaboration and helps them reduce the costs of their internal IT spend.
For Risk Management: AWS and Microsoft Azure
Risk management has always been a major concern for banks, with methods of dealing with risk changing to stay ahead of the risks themselves. McKinsey has found that “today, about 50 percent of [risk function] staff are dedicated to risk-related operational processes such as credit administration, while 15 percent work in analytics. McKinsey research suggests that by 2025, these numbers will be closer to 25 and 40 percent, respectively.”
Two cloud solutions that can help in this shift toward analytics are Amazon Web Services (AWS) and Microsoft Azure with Moody's Analytics. Bankinter, an industrial bank in Spain, used AWS to run credit-risk simulations. Where their average time-to-solution had been 23 hours, AWS dramatically reduce processing, and the time-to-solution decreased to an average of 20 minutes.
Microsoft Azure hosts Portfolio Risk Analytics, a cloud-based financial projection software powered by Moody's Analytics. This service keeps you up-to-date on economic scenario data and content so that you can calculate portfolio risk accurately.
For Security: Microsoft EM+S and Azure Active Directory
Security is a huge concern, and some banks may not be adopting the Cloud because executives don’t realize that data is not stored in the Cloud.
“In an enterprise-class cloud environment,” fintech expert Ron Shevlin says, “the computing resources will be multi-tenant, but the data will not.”
One such enterprise-level cloud solution is Microsoft Enterprise Mobility + Security, a platform for mobility management and security. It offers cloud security to protect and secure banks and gives employees flexibility as they work.
Azure Active Directory is another solution. It protects user credentials by using authentication and conditional access policies. It also allows banks to manage identities by giving people appropriate access to the resources they need.
For HR: Oracle Human Capital Management
Human resources (HR) systems make the bank go ’round. Cloud-based solutions help them stay as helpful.
“As in-house Human Resources (HR) systems age, more financial services companies are considering cloud-based HR that offers not only core HR software like payroll and benefits, but also emerging HR software like talent management,” Mary Shacklett, a writer at ZDNet, explains.
One cloud-based HR software to consider is Oracle HCM (Human Capital Management). This solution helps with recruiting, employee development, and succession plans. It also helps banks predict which employees might be thinking of quitting, drive employee engagement, and configure org charts.
For Customer Relationship Management: Financial Services Cloud by Salesforce
Based on customer service metrics, Salesforce’s Financial Service Cloud has led to 46 percent faster collaboration for their commercial banking clients. The Financial Service Cloud aims to improve transparency, increase awareness of customer interest, and provide streamlined and convenient service for customers.
For Credit Checks: Experian and TransUnion
Banks need to make sure they can make precise customer-lending decisions based on accurate data. Experian and TransUnion are two solutions that can help. Both Experian and TransUnion offer cloud-based platforms that offer large data sets and analytics to make decision-making simpler.
For Small- to Medium-Sized Banks: Fiserv and Jack Henry & Associates
Fiserv and Jack Henry & Associates are two services that offer cloud-based core banking systems. The systems are offered in both turnkey packages and also as individual systems. Using a turnkey solution like one of these removes the hassle of creating a program in-house and gathering all the approvals needed. With a solid understanding of the banking industry, both services are a good option for small- to medium-sized banks for which multiple cloud-based banking systems or in-house systems may not be viable options.
The Cloud is key to digital transformation in banking, where so much depends on providing a secure and seamless experience for customers. With any of these top 12 cloud solutions, your bank can take great strides towards a bold digital transformation.