How the Cloud Impacts the Financial Services Industry
Jun 20, 2023
The financial services industry has been slower than other sectors to adopt cloud computing. Many financial companies still rely on on-premises IT, legacy mainframes, and monolithic applications. Migrating and refactoring these resources can take considerable time and effort – enough to keep IT leaders from making the switch. However, things are picking up steam, thanks to the many ways in which cloud technology has evolved.
Today’s leading cloud service platforms, like AWS, offer a multitude of tools that make it easier to leverage best-in-class technology with minimal IT management. This is great news for financial services organizations that need to create value, innovate, and cut costs. The world is changing faster than ever, and one of the best ways to keep up is to embrace the cloud.
What’s on the Horizon in Financial Services?
It’s increasingly clear that the cloud offers numerous benefits for financial services companies. Looking ahead, those who use the cloud effectively will separate themselves when it comes to:
- Using big data to inform decision-making
- Keeping consumers safe via robust fraud detection and security
- Bringing personalized products to market quickly
Big Data Analytics
The cloud unlocks big data in multiple ways. On the cloud, financial services companies can ingest, store, process, and analyze data at massive scales. This data can include banking statements, customer portal log data, marketing engagement metrics, real-time spending information, and much more.
Financial institutions no longer have to be bound to the limits of their on-premises IT or in-house technical capabilities. Instead, they can now offload that infrastructure and work to the cloud where compute and storage are available on-demand under pay-as-you-go pricing models.
What’s more, all the financial data that companies keep is safer in the cloud. That’s assuming data engineers configure their cloud environments appropriately. Cloud platforms like AWS provide solutions that automate security assessments and simplify access control. They also make it easier to maintain regulatory compliance at a time when governments worldwide are adopting stricter policies for data management.
In the future, big data analytics will be even more accessible to financial services organizations than it is today. The question that teams will be asking when it comes to big data is “what” to analyze, rather than “how.”
Better Fraud Detection
On a related note, fraud detection – powered by big data – in the financial industry will grow increasingly important. Through the cloud, financial organizations can build, train, and deploy advanced AI/ML algorithms that have the ability to identify patterns that would otherwise be invisible to human analysts. These patterns may represent fraudulent activity, biases, or human errors.
Going forward, fraud detection capabilities on the cloud will get smarter and faster. Companies will be able to catch bad actors or problems in their algorithms quickly. The key will be learning how to maintain and finetune ML models over time. As we’re learning, ML models do degrade, which means AI isn’t a “set it and forget it” type of technology…yet. Fortunately, cloud platforms like AWS recognize the power of AI/ML and continue to invest in solutions to make the technology easier to manage.
Personalized Financial Products
Another way that the cloud will continue to shape the financial services space is by empowering companies to deliver more personalized offerings to customers. The abundance of data available today can be used to create products that cater more to individual needs, rather than broad demographic groups. Organizations will be able to create better customer experiences and focus their marketing efforts to maximize ROI.
Additionally, engineering teams will have more freedom to innovate. They will be able to automate crucial parts of their IT infrastructure and development processes, ultimately decreasing time-to-market. And organizations that want to give users more control over their accounts will be able to build useful self-service portals. The age of efficient personalization in the finance industry is here. Enterprises only need to figure out how to build agile and integrated cloud environments in which everything works together to improve the customer experience.
How ClearScale Supports Financial Services Organizations
ClearScale understands the unique challenges and opportunities facing financial services organizations today. Our cloud engineers have tackled many types of projects in the finance industry, all while keeping regulatory compliance in mind.
We recently worked with a premium financial card manufacturer that wanted to migrate from Azure to AWS. Our engineers completed the migration in an ambitious time frame, implementing best practices every step of the way. Following the migration, the client was able to bring new products to market faster, as well as upgrade its services for customers.
We also helped a provider of property management financial solutions boost its cloud security and DevOps processes. The company wanted to enhance its code deployment process and leverage infrastructure automation. Our engineers used a variety of tools from AWS to create a new Landing Zone for test, stage, and production environments. We also used Terraform as the foundation of an Infrastructure-as-Code (IaC) solution. The organization’s engineers now have more time to focus on application development and new ideas.
In another engagement, we helped a FinTech company rearchitect its SaaS platform on AWS. The company’s SaaS infrastructure was struggling to scale with demand. We rearchitected the multi-tenant SaaS platform, modernized the UI interface, and implemented a continuous delivery pipeline through Docker container deployments. As a result, the business’ SaaS platform now enables seamless integration with different online banking platforms and supports shorter release cycles and deployments.
These projects represent just a fraction of what ClearScale can do on AWS for financial services organizations.
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