Blog by Andrew Coles, Head of Solution Consulting, Surecomp
19 February 2021
As cloud adoption continues to gain pace across all industries, banks are increasingly seeing the value. Recognizing that the benefits are outweighing the risks, they have begun moving away from their legacy IT infrastructures and are achieving significant results in the process. There have been some important moves recently with notable deals between cloud vendors and major banks which are now changing the face of cloud adoption, particularly in the world of global trade finance.
These traditionally slow movers were previously reluctant to migrate away from their existing infrastructures which were often build up at great expense over many years. Harbouring resistance for a number of reasons, banks had concerns around security and privacy, regulatory concerns about the robustness of cloud-based services in supporting crucial financial applications, and the perceived risks of overdependence on a few major cloud services providers who are largely unregulated.
Another major factor was the ability of the legacy solutions already in use at these organizations and their incompatibility with cloud-based architectures. Banking applications – sometimes twenty or thirty years old – were built long before the idea of microservices, elastic computing and open API standards were commonplace. But as the technology underpinning cloud computing matures, and the major tech players, such as AWS, Google, Microsoft, etc., engage more closely with the regulators in order address concerns around data privacy and security, banks are starting to feel more comfortable and have begun accelerating the migration of more mission-critical systems to the cloud.
Three of the major benefits banks can realize through cloud adoption are:
In order for banks to grow their business on legacy infrastructure, they would typically need to invest in new physical hardware to support an increase in volumes. This leads to a conundrum; do they invest up front in scaling the architecture to support future growth aspirations and maximum potential utilization – or run the risk of failing to support the business growth while acquiring, setting up and configuring additional hardware? Unexpected shifts in user behaviour – for example increased remote working as a result of COVID-19 – could leave banks exposed and present a significant reputational risk. Moving to a cloud-based deployment not only enables this agile scalability, but also means that banks only need pay for the computation power they are consuming, which brings me to my next point.
One of the key benefits of moving to the cloud is of course overall cost reduction, not just operationally but particularly in relation to delivering new solutions. Moving solutions to the cloud removes the overhead of onsite infrastructure management and application support, upgrades, maintenance, back-up and disaster recovery tasks to name but a few. It allows bank resources to focus on customer value added tasks rather than spending time and effort just to keep the lights on.
Moving solutions to the cloud provides agility and opens a pathway to offering innovative new solutions to your customers. Forward thinking solution providers are augmenting their existing offerings with open API based solutions; take Surecomp’s Marketplace for example which enables banks to open up their solutions and engage with the ever-growing ecosystem of innovative fintechs to provide a wealth of opportunity – not only to enhance productivity, but to delight customers with innovative solutions to digitize their banking experience and take advantage of the possibilities presented through initiatives such as PSD2 and open banking.
At Surecomp, we are bringing these benefits to our global customers through providing cloud Trade Finance-as-a-Service deployment capabilities of our market leading trade finance solutions, and via the aforementioned comprehensive Marketplace of third-party solutions. Enabling scalable, modular deployments to meet both current business needs and future growth aspirations, we are driving innovation in trade finance through the use of artificial intelligence, machine learning and blockchain technologies.