written by Quadri Badru;

edited by Araoluwa Abdulazeez Ogundairo

Cloud application in the finance industry

As proper maintenance of business operations and financing is to a firm, so is the proper storage and processing of its data. The era of the on-premises data is fast coming to an end after the introduction of cloud computing. Initially accessed for entertainment, healthcare, finance and government, the need for the cloud is gradually evolving over time as it has been embraced by the majority of organisations. It is noteworthy that cloud spending rose by 37% to $29bn during the first quarter of 2020.

In March 2017, the Cloud Industry Forum reported that the UK’s overall cloud adoption rate had reached a record high of 88%, an increase of 5% from 2016. Prior to this period, the financial service industry was reluctant to adopt this innovation in its practice due to the cloud’s outdated security concerns. As of today, more than 25 of the world’s 38 largest financial organisations and insurance businesses have partnered with Microsoft. The IBM and Bank of America partnership led to the creation of the Bank of America private cloud and that of Goldman Sachs and AWS brought about the GS Financial Cloud.

How cloud computing is changing TradFi

Saving time and costs

Bank of America has saved about $2 billion by building its own cloud. The high cost of the establishment and operation of a bank can be attributed to the high cost of hardware acquisition and maintenance fees. This is a result of the creation of new data centres and servers, staff recruitment and training. All these costs can be avoided as cloud services are typically subscription-based, and companies can scale requirements up or down according to their needs.

Better focus on the work that counts

The cloud is freeing the finance function from administrative tasks, helping them win back valuable time from mundane tasks and, in doing so, giving them the opportunity to lead digital transformation. This is particularly important for businesses that are operating across multiple markets with numerous target demographics and must optimise all aspects of their organisation to retain a high level of efficiency.

Creation of tailor-made products for consumers

The cloud’s combination of big data and potentially unlimited computing power allows banks to secure better insight into their clients than ever before as it enhances firms’ ability to develop systems that can render services that meet their clients’ expectations.

Big data insights

There are still compliance issues to be mindful of with the cloud, but leading cloud providers and other expert consultants can help ensure businesses meet relevant regulatory policies and processes.

Data security

Safer data handling is one security benefit of the cloud, which provides an additional layer of protection over data stored on laptops or USB drives that can easily be stolen or lost through the physical security measure managed by the firm.