The banking sector in India is rapidly changing mainly due to regulatory pressures, decreasing margins and fierce global competition. To survive the wave of changes, banks have to adapt and respond with the evolving market, at the same time they have to concentrate on getting the regular business done while keeping costs low. Having tried other methods to align businesses to the shift in consumer behavior and requirements, the banks now realize they need better tools to handle the daunting demands.
Agility, efficiency, and operational transparency are the need of the hour. Delivery of solutions and services has to be done at a very rapid pace to gain genuine customer satisfaction. A new, customer centric business model – both cost effective and with shorter cycles of time to market for products and services is required. A perfect case for cloud computing.
The cloud enables banks and financial institutions to buy computing capacity, storage and network bandwidth on demand without the need to invest in hardware or software, doing away with the need for upfront CAPEX. With its shared service delivery, excellent agility, and pay per use features, an increasing number of banks are testing and adapting the technology.
The Banking Cloud:
The most significant regulatory development that pushed banks towards large scale IT investments was the RBI’s directive for all banks to implement a core banking solution (CBS). This brought in the need to build an IT infrastructure aligned to the banks expansion plans and has provisions for disaster recovery (DR) for all that sensitive data. Cloud computing allows them a very scalable, robust and highly available infrastructure without them having to make heavy capital investment.
Many cloud providers are offering a fully automated cloud model inclusive monitoring and management services so organizations do not have to invest separately in those. Services are shared across trusted domains ensuring security for the data storage, transactions and operations- even with service partners.
Cloud computing will be of great help to small and co-operative banks too. Previously, the costs of investing in an IT infrastructure deployment were prohibitive. Now, they can serve their customers better and in a more secure way while sharing resources like hardware, software and banking softwares- all of which service providers are offering in their portfolio. Lower TCO for the banks will translate into cost effective and more services to a greater number of customers in a country like India where sections of populations still remain under-banked.
The SaaS on cloud model enables anytime, anywhere availability to the bank employees so they can respond faster to the customers’ needs- especially so sales force who can access data from anywhere. A ‘core banking on cloud’ service would make perfect sense as the data would remain centralized and people can access it from outside. Cloud computing delivers productivity at a lower cost than traditional methods, all without compromising on security or manageability. Trend will shift towards the adaption of private cloud and enterprise cloud to accommodate the banking requirements with greater customization, security and access to unlimited computing power.
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