Cloud computing has evolved from technical jargon to a promising future in the business space. Because, over the last decade, businesses of all sizes have embraced cloud services in quest of improved services and long-term cost benefits. This impact of the cloud is evident from the following facts:
|According to Gartner, cloud computing is one of the top three investment priorities for almost a third of companies.|
|The 2020 IDG Cloud Computing Study shows that, in addition to the increase in organizations’ migration towards the cloud, over 55% of them are using multiple public clouds.|
|As per the Valuates report, Fintech is one such promising sphere that is predicted to show a compound annual growth rate growth of around 23% in the upcoming years.|
FinTech is a high potential collaboration of the financial services and technology sectors to serve customers in the traditional financial services industry with innovative products and services. The FinTech revolution is catalyzed by the adoption of the cloud in the race to provide customers and end-users with more speed, reliability, and 24/7 uptime in their digital products and services, in a cost-effective and secured manner.
Also, the scope of cloud computing is not just limited to cloud-based platforms, applications, and business processes; it goes beyond and focuses on how to open new avenues for the fintech industry in terms of:
The following characteristics of Cloud technology shape FinTech’s future
Data is the key driving factor of the financial services industry. The demand for data acquisition and processing develops in tandem with the industry. Fintech deals with data from customer onboarding, account management, balance checking, spending patterns, etc. The adoption of cloud technology enables fintech companies to store, manage, and access volumes of data from anywhere and at any time at scale with security, cost-efficiency, and autonomy.
According to a study by Information Age, 42% of financial services organizations lack the required information security skillset. Undoubtedly, for fintech providers, security is at the forefront of their minds when adopting new technology. Thus, information security remains a serious concern for CISOs. When properly deployed, cloud applications are as secure as traditional deployments. The security of the cloud has increased in recent years with zero-trust verification and encrypted data. Thus, cloud infrastructure proves itself no riskier than traditional IT infrastructure setups, when adequately trained staff and access control are in place.
With the cloud, fintech can deploy new ideas and product iterations from a validation and production standpoint in a more agile fashion. The provisioning of environments while monitoring for continuous compliance enables improved adaptability to changing business and technology needs.
Cloud data scaling removes obstacles to AI use, such as the lack of sufficient data sets available to generate historical behavioral intelligence. It enhances customer interactions through chatbots, surveillance, ideas from unstructured data, and customized product offerings.
The increase in the need to access and manage finances from a distance by both individuals and businesses has boosted self-service applications based on cloud technology, which helps companies to deliver this technology at a relatively rapid pace. These tools may be self-service kiosks or apps. But it increases autonomy and flexibility for users. This autonomy helps them with opportunities in managing and planning their finances.
As mentioned, fintech has the potential to grow rapidly. As a result, they want infrastructure that can keep up with their demands while posing few obstacles. Cloud characteristics such as ease of scale and agility make it an apt option compared to on-premises technology infrastructure, which is costly to upgrade. Even for traditional banking organizations, the cloud platform provides the flexibility to adjust to branch closures while continuing to serve as many customers as feasible. For both fintech and financial behemoths, moving infrastructure to the cloud improves accessibility, flexibility, and scalability.
The cloud offers enormous computing power to create systems with tailored solutions that offer better insights to their clients and hence increased customer satisfaction.
Above all, the notable feature of Cloud technology is that it is primed for the future. Most new applications are open source and cloud-based, allowing fintech companies to use them for free, deploy them swiftly, and customize them for their own needs.