Cloud Computing Gives Banks Freedom to Innovate
Migration to the cloud will empower banks to focus on their core business and devote their capital and resources to better banking solutions – rather than IT.
Migration to the cloud will empower banks to focus on their core business and devote their capital and resources to better banking solutions – rather than IT.
“The core business of banks is not to run IT. It is to provide efficient financial services to their clients. This is how transformational moving fully into the cloud can be to the banking sector,” says Alan Cole, global head of Cloud Delivery and Operations at Temenos.
Temenos is a leading, global banking software company and, working with Microsoft Azure, was the first to put core banking in the cloud.
Cole says the global banking sector is becoming more and more open to migrating to the cloud as executives recognise how cloud computing can deliver flexibility and agility to their systems that would be impossible to achieve on their own.
Agility
“Customers expect to have banking at their fingertips and a cloud-based solution provides banks with the agility to achieve that, increasing the speed to market and reducing the cost of bringing new products and applications to market.”
Cole explains that until recently banks were forced to commit large amounts of capital, as well as time and human resources, to establishing and maintaining their own infrastructure and systems. This means that while disruptors and customers are forcing banks to continuously develop new products, many still devote a lot of time and resources to simply maintaining the complex systems behind their existing functionality. At the same time, these legacy systems can make the process of developing, testing and rolling out new applications much more difficult, time-consuming and expensive.
Cole says that while the days of banks devoting time and money to running their own data centres are numbered, Temenos understands that for many banks complete migration to the cloud will take time.
While banks want to make the most of the legacy equipment they already own, a cloud-based solution allows them overcome the limitations of their current infrastructure.
“If a bank wants to give its clients the ability to open a bank account within 30 seconds, there could be a limit to how many clients could use this function at once. A cloud-based solution allows the bank to make use of a truly elastic platform that scales to meet the demand from its customers at any one time – so whether there are 200 000 people trying open a bank account or only one, the platform can adapt to meet demand.”
Guy Griffin, global commercial manager at Temenos Cloud Services, adds that while the huge investments they have made in their own legacy systems have made some banks hesitant to migrate to the cloud, the African banking sector is much more open to the cloud evolution.
Products to Accelerate Cloud Adoption
Temenos recently launched two new cloud-native and cloud-agnostics products – Temenos Infinity and Temenos Transact – to help banks further accelerate cloud adoption.
“The African banking sector is already far along in its digital journey. While issues around connectivity remain, African infrastructure has also been able to leapfrog certain development steps that other more developed markets like Europe had to go through,” says Griffin.
He adds that the availability of smartphones and cellular networks, and the creation of over-the-air and wireless networks, has enabled a real acceleration of certain elements in the technology journey of African banks.
“This means that the evolution has been expedited in some respects and executives are willing to look outside of the box and work with us to build something that is relevant and scalable to bring new solutions to our clients.”
Griffin says that while regulatory hurdles and concerns over data security first inhibited cloud adoption among banks, this is quickly changing. “One of the key benefits to banking clients when their bank makes use of a cloud-based solution is the added security it brings. If you know that your bank is tapping into a $160 billion security investment instead of just whatever its standalone budget would be, that is reassuring.”