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Skeleton Key: Banks Can Use Cloud to Unlock Everything Else

The COVID-19 pandemic accelerated digital adoption throughout the banking industry – establishing new, irreversible behaviors among businesses and customers.

With a renewed appreciation for digital transformation, financial institutions are revisiting their hitherto short-sighted cloud-adoption strategies. Banks need to understand that cloud is far more than a storage method. In essence, cloud is a skeleton key that unlocks all possible doors toward a more innovative and agile future.


Michael Walsh

Senior Writer, Global Content Strategy

How we got here

Rina Pandalai, a financial services strategy lead at Publicis Sapient, argues that a confluence of factors (low interest rates, loan losses, etc.) threaten to wipe out many regional banks. People aren’t visiting physical branches anymore and low interest rates undermine the profitability of deposit/loan-related products.

“The banking industry has really evolved and is evolving fast,” Pandalai said. “We’re entering a period where banks can’t survive because the economics don’t hold up. So, there’s a wave of different banks consolidating and becoming new entities that need to consider things like re-platforming.”

As digital disruptors seize greater market share, the formerly autonomous, recently consolidated banks will need to accelerate new positions in the marketplace. In a matter of months, these banks can leverage cloud to launch new business models that create value, connect with customers and deliver unique products and services.

In the throes of change, financial institutions that master the transition to cloud will emerge with stronger brands and customer experiences. But they need to understand the true scope of the cloud revolution.

Skeleton key for Industry 4.0

Most people know that cloud is a method for storing information at data centers around the world, so it doesn’t need to be saved and run locally. Cloud is not a specific kind of software but a network of on-demand computer-system resources that add agility to systems architectures.

It’s not really a solution to a specific problem. It’s a computing paradigm that enhances and accelerates other technologies so they can solve a wealth of problems.

Financial institutions can use cloud to streamline operations, modernize web applications, improve the customer experience, heighten security and simplify compliance – when approached with the right mindset. Here are just six of the many doors cloud can unlock for financial institutions.

1: Streamlined operations

As Publicis Sapient CEO Nigel Vaz points out, the inherent benefits of cloud for financial institutions are threefold: cheaper storage, stronger computing power and greater access to information regardless of location. This trifecta empowers businesses to outsource required but not brand-specific operations and access cutting edge technologies.

A comprehensive audit could sort through which procedures need to be in-house, should be contracted out and can be eliminated altogether. As business partners build and operate more infrastructural components, banks can cut capital expenditures (maintaining physical equipment) and operational expenditures (running daily business).

2: Application modernization

The newfound agility frees up banks to create more value and craft better experiences for their customers. They can achieve this by turning to cloud once more to unlock the potential of other technologies.

Image showing value of cloud: Cheaper storage, computing power and information access
Once the technological infrastructure is in a secure cloud environment, application development teams will have more time and energy to build new tools that meet current market demands and client expectations.

Banks need to upgrade modern web applications quickly and frequently to stay relevant and competitive. Cloud can support modular design, which allows developers to modify or replace specific parts of an application or system without disrupting the whole, and deployment automation, which results in faster feedback, increased collaboration, greater consistency across environments and, most importantly, more time for engineers to focus on developing new software.

Publicis Sapient offers a Web Application Modernization solution that prepares organizations for rapid innovation at scale with cloud-native technologies.

3: Customer centricity

Thanks to cloud, the exponential rise in data collection and computing power means companies have more information on customer behavior and more resources to make sense of it than ever before. The problem is no longer a shortage of data but accessing the right cloud-native tools to analyze it and produce insights.

By deploying artificial intelligence (AI) and machine learning (ML) over cloud, banks can extract relevant information through knowledge as a service (KaaS), synthesize multiple sources of data for a centralized view of the customer with a customer data platform (CDP) or create real-time models of behaviors and intent- signals with the Identity Applied Platform (IAP).

Through these and similar solutions, cloud enables and supercharges previously unavailable levels of data collection and analysis, which banks can use to strengthen customer relationships and enhance customer experiences. The right contact time and method will be available to marketers and sales representatives for attracting prospects and financial advisers for helping current clients.

4: Security and compliance

Regulatory agencies carefully monitor the financial industry to protect consumers from fraud and sustain trust in the banking system. Although some countries have stricter regulations than their neighbors, safety and transparency should be top concerns for all companies in this space.

Although necessary for preventing irresponsible behavior, strict protocols and procedures can have the unfortunate side effect of inhibiting innovation. An abundance of caution can lead people to keep sensitive data off the cloud – fearing leaks and breaches.

In this environment, the growing acceptance of cloud in financial services reflects not only that it’s an existential necessity, but that its security solutions have matured greatly over the years.

Major cloud providers have much higher standards than the average IT department (especially for smaller banks) and need to demonstrate their track record of safety regularly. They provide around-the-clock support and can respond to problems straightaway. At the same time, cloud-supported AI can analyze vast amounts of data to support safety and provide real-time recommendations.

When implemented correctly, cloud environments can be safer than traditional storage systems and ensure compliance with industry standards. The same power and agility that gives a bank unprecedented views into customer behaviors or market trends can provide similar visibility into the institution itself.

5: Continuous transformation

As banks migrate more of their operations to the cloud, tap into ever-increasing computing capacity and access ever-growing datasets, they will have more time, resource and knowledge to continue their digital transformation journeys.

By prioritizing cost optimization and return on investment, financial institutions can ensure that their cloud-enabled transformation programs are delivered with an agile and continuous-improvement mindset.

Cloud-supported measurement tools, such as KnowHow, can track key performance indicators to help maximize business value and reduce spending – all while improving tools and processes throughout the entire organization.

6: Composable banking

Cloud enables a new standard of core banking modernization, which is revolutionizing the banking landscape as we know it today.

Every financial institution has a system that powers their banking transactions. Historically, this core banking platform was on premise (i.e., in a physical office or data center) but banks still need one within the cloud environment.

Moving to the cloud is becoming more affordable thanks to the availability of both cloud providers (Amazon Web Service, Microsoft Azure, Google Cloud Platform, etc.) and startups that build core banking in the cloud (Mambu, 10x, FIs, etc.).

“That enables application environments. You can just plug it in and go. You can build a bank in just six months on the cloud with these new innovations and actually have your core in the cloud,” Pandalai said.

The German startup Mambu is pioneering a software as a service (SaaS) cloud banking platform it calls “composable banking.” Rather than locking companies into hard-coded integrations, composable banking lets companies build and change their banking products quickly and easily – essentially letting them compose what’s right for them entirely in the cloud.

Getting started


The status of perpetual refinement – on the cutting-edge, keeping pace with technology’s evolution – is where every bank would like to be. But overly risk-averse leaders have set many institutions back to the point where it can be hard to know where to start.

Financial institutions are in a difficult position. They need to migrate to the cloud to stay relevant but face unique and complicated challenges related to risk, compliance and security.

But there are finance-specific solutions, such as the Cloud Acceleration Program (CAP), designed to help banks lay the required foundation for cloud computing and bring it to scale quickly and easily.

CAP customizes the entire transformation journey for individual firms that avoids the most common hurdles as well as challenges specific to that client. This program also provides the necessary technical tools and resources to ensure efficiency, accuracy and speed.

“There’s a cost-benefit of moving to the cloud. It’s not an asset that needs to be depreciated. The economic models around cloud are really innovative,” Pandalai said. “You can build a bank on the cloud in eight months, soup to nuts, end to end.”

Rina Pandalai
Rina Pandalai
Financial Services Strategy Lead

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