March 4th, 2021 | Updated on March 5th, 2021
Over the years, the banking sector has seen a steady transformation. One of the impactful changes has been the introduction of core banking using digital technology.
The core banking system allowed customers access to banking facilities any time and from anywhere. It improved the efficiency of operations and customer experience to a significant measure.
However, there is still an immense scope to improve the current core banking services. Banks are still heavily dependent on in-house legacy IT systems for their core banking functions. These IT systems are cost heavy and also lack the flexibility to meet today’s core banking needs.
Traditional banks are also facing competition from neo-banks and Fintech companies. These organizations are garnering a share of the customer base using modern technology and innovative approaches to banking. Also, they score in terms of operational efficiency and better customer servicing.
Banking customers also have higher expectations from their banks presently. Being more tech-savvy, customers want to interact with their banks and access the services on the go. Customers today are moving from face-to-face banking to remote banking via smart devices, and banks need to gear up for this change.
The solution to meet all these challenges is implementing a cloud-based core banking system.
Brief about Cloud Computing
Before going further into what cloud-based core banking software is, let us quickly understand cloud computing.
Cloud computing is the technology that allows the delivery of IT services on-demand using the internet. Here users can access computing software, databases, applications, and storage according to their requirements from the cloud without owning or maintaining data centers and servers.
One of the industries in which cloud computing finds use is banking and finance.
What Are Cloud Core Banking Platforms?
Cloud-based core banking involves moving the core functions of a bank to a cloud provider. Banks can then make use of the computing, storage, networking, and applications of the cloud to improve their operational efficiency.
To undertake this shift, banks need appropriate cloud-based banking software. Today, there are numerous top core banking software available in the market that allow banks to migrate their core operations to the cloud. For example, the Finacle core banking solution is powering many of the digital core banking activities around the globe of premium banks.
Core banking software companies provide the platform for banks to develop cloud-native core banking applications. These agile core banking solutions not only reduce cost but also improve the efficiency of banks. Such a cloud core banking system can enable banks to transform digitally in the correct sense.
Why Use Cloud Banking Software/Platforms?
Now that we have understood what cloud-native core banking system software is, here are the advantages of using these platforms.
1. Develop and deploy banking products in a short time:
Core banking platforms for cloud support the development and testing of applications across all cloud types, i.e., public, private, and hybrid. As banks can access IT and computing resources as needed, it is very cost-effective and fast to develop these customized banking products.
2. Deep customer insights:
Core banking software like Finacle core banking system empowers banks by giving real-time insights about customers. Banks can develop customer-led core banking products for personalized customer experiences.
3. Real-time processing:
Banks using these platforms have the advantage of real-time processing of their own transactions as well as transactions from third-party platforms. The number of transactions that bank witnesses in a day are humongous and cloud-enabled-core banking software allows banks to process them efficiently.
4. Risk mitigation:
Banks using cloud core banking software can migrate their core at any pace without affecting the stability of the systems. It gives banks flexibility to undertake either an all-out move to the cloud or progressively one function at a time.
5. Unparalleled security:
Cloud core banking platforms offer protection to infrastructure, data, and applications hosted on the cloud. Many of these cloud banking platforms are certified by international agencies and are a value addition as banks operate in a highly regulated environment.
Core banking technology using the cloud has many inherent advantages that you can’t ignore. Cloud banking platforms are facilitating the seamless movement of core operations of banks to the cloud.
Banks still have a long way to go before they aggressively adopt cloud technology for their core functions. But banks that are early adopters are seeing gains in terms of agility, cost reduction, better customer servicing, and security.
Cloud-driven core banking is the next revolution in the financial sector, and we can see banks seriously considering it for more of their operations.
We hope you found this information on core banking on the cloud useful. Do share your thoughts on how you see cloud banking platforms impacting digital core banking in the future.