Banking and the cloud; don’t let the hype… well… cloud your judgment

Start by understanding the risks and costs of cloud, how this model would benefit your business then assess what IT assets you want to migrate.

Tesco Bank now views cloud as business as usual after a full migration in less than nine months. However cloud has struggled to make significant inroads in large banks due to issues such as availability, data privacy, security and vulnerability. Small businesses and startups are flocking to this not-so-new model; cloud works well for small businesses using Software as a Service (SaaS) products like Google Drive, Dropbox, and Quickbooks.

FNB has been experimenting with cloud models, we ran two types of services for the 250 developers who attended our October 2015 codeFest; Obsidian provided OpenShift and Microsoft set up Azure. Cloud computing offers on-demand IT services with a per-usage cost model and it is important that we explore how this technology helps us build better products and services for our clients. You can also rationalise your IT skills base if platforms are consolidated into the cloud but then your risk moves from HR to Finance and Procurement.

28 new banking licenses were awarded in the UK over the last decade; a result of looser banking regulation and the continued rise of disruptive banking technology (including cloud). South Africa has a very advanced banking system with innovations that are only recently being rolled out in more developed markets, such as FNB’s inContact notification service. With cash usage still growing in this country and a huge new-to-bank population, future success in this country is still likely to come from a balanced, customer-centric “clicks and bricks” strategy.

In a recent Banker SA magazine article on Cloud and Banking I also highlight the importance of deciding which IT assets differentiate you in your market and thus should remain core and kept on-premise. Typically in banking these are channel, or customer facing solutions which are also usually highly customised, highly digitised and provide competitive advantage. Back-office processes such as Finance, Procurement and HR are easily standardised onto packaged ERP platforms such as Oracle and SAP and can more easily be migrated into the cloud.

FNB also offers individual and business customers a cloud based suite of products called Instant Solutions which includes functions such as Payroll, Invoicing, Accounting and Cashflow. These SaaS products help our customers run their businesses better, are free and fully integrated into their online banking. Cloud does offer benefit for banks and their customers and should be on the CIO agenda; prioritise non-core IT assets, decide what risk you are willing to manage or outsource, then start  your journey. 

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