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Author's profile photo Falk Rieker

Why You Should Be Banking in the Cloud: For a Single View of Your Customer

Banks around the world are flocking to digital tools and new technologies both to meet higher customer expectations and to respond more quickly to their changing environments. One of the most beneficial technology adoptions has been the move to cloud-based technology platforms and financial applications.

More than half of banks worldwide (60 percent) will process the majority of their transactions in the cloud as early as this year, according to Gartner. This includes daily bank transactions, account updates and deposits, as well as loan- and credit-processing capabilities.

So financial institutions should act fast if they don’t want to be left behind.

Reduce Operational Costs While Boosting Innovation

More than 93 percent of financial service executives believe cloud solutions will transform their organization, according to a recent SAP benchmark survey. By moving core banking systems to the cloud, financial institutions are able to re-focus their resources to better understand and serve customers, rather than maintaining 30-year-old technology or managing difficult integrations to legacy systems.

A single, integrated, cloud-based system allows financial institutions to build a window into their operational, process and customer information – getting a real-time, 360-degree view of customer activity, and eliminating the complexity of the multistep process for customers to gain a comprehensive view of their accounts. This is a singular system that consolidates critical data, enabling straight-through processing from account opening to transactions and balances for customers.

Another benefit of moving core banking systems to the cloud is the ability to reduce system maintenance costs, which lowers legacy technology worries. This allows banks to re-focus budgets on innovation, customer satisfaction and growing the business.

For example, the Bank of New York Mellon has been using a private cloud for the past three years. It has improved the bank’s ability to innovate; nearly doubled the density on servers compared to virtualization alone; reduced data center power consumption; and largely eliminated manual patching, according to Dr. Swamy Kocherlakota, managing director, global head infrastructure architecture and engineering.

Connect ERP, CRM and More – All in Real Time

Breaking away from legacy systems and into the cloud liberates banks from the constraints of outdated technology, a move that can open up a world of data. By consolidating, analyzing and leveraging this data, banks can then provide the relevant information and instant access that customers demand. 

For example, when making a banking transaction, customers want to see the result of their actions immediately to ensure accuracy and security.

Moving applications and platforms to the cloud also enables banks to provide a consistent, digital experience across all customer-facing channels – mobile apps, Web site, social media and phone – helping improve experiences for consumer bank customers. Instead of attempting to upgrade and integrate legacy systems to support new functions like mobile banking, a solution such as SAP Cloud for Customer offers a fully complete, robust solution with prepackaged integrations to ERP, CRM, mobile platforms and social connectors that can help banks stay on top of the latest customer demands.

Connecting ERP systems to the cloud also allows banks to provide a full range of commercial services – including payments and related services without the need for custom interfaces for each corporate client. Additionally a best-of-breed cloud suite can cover all lines of the financial business with end-to-end integration, innovations in human capital management, procurement, sales and social collaboration. By covering all lines of business, companies are better able to provide a customer-centric experience across digital channels, manage regulatory reporting and risk, drive efficiency and be more flexible to adapt as market needs evolve.

For example, international insurance group Ageas recently adopted the industry’s first end-to-end enterprise insurance software in the cloud, deployed on SAP HANA Enterprise Cloud. The company now has a centralized platform for policy administration, quotation, underwriting, claims, commissions, collections and disbursements, as well as finance, procurement, HR and enterprise analytics. This integrated set of solutions gives Ageas full visibility into operations and supports the agility it needs to help establish and penetrate new markets.

Be Flexible and Fast!

The flexibility doesn’t stop there. Applications outside of core banking, leveraged by financial institutions, can also benefit from cloud-based solutions. Companies moving human resource functions to the cloud can manage the entire workforce much more easily due to the consolidation of data and systems. This includes everything from initial recruiting and onboarding to ongoing development, performance management, retention and retirement.

The world of banking isn’t slowing down. For financial institutions to stay ahead of the pack, they must be ready to take on new challenges. This means moving the majority of core banking – daily bank transactions, account updates, deposits, and loan- and credit-processing capabilities – to the cloud. Financial institutions don’t just need to embrace cloud solutions: They need to do it now.

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      Author's profile photo Marcin Krawiec
      Marcin Krawiec

      Hi Falk

      great post!

      All valid points! And so is the feedback from some of the customers in Banking Space we talk to.

      Cloud for Banking makes definitely sense!

      Happy to elaborate on our latest achievements.