The tide of innovation in business continues to grow at lightning speed, leaving C-suites and company leaders continually trying to keep up. With customers expecting new service levels and new forms of digital banking joining the sector, the financial industry is especially feeling the pressure to move forward with digital transformation and cloud implementation.
Amidst a fear of falling behind, the banking industry is spending a large chunk of its budget on technology and IT. Deloitte reports that while the average amount spent on technological upgrades for all industries is 3.28 percent of a company's total revenue, financial institutions are spending 7.16 percent, increasing their IT budgets an average of 51% from 2016. In other words, many banking leaders are recognizing the need for a flexible cloud infrastructure to help increase revenue, enhance the customer experience, and cut costs. But many are still left just on the brink of digital transformation, concerned about making the jump to the cloud.
Overcoming the Fear of Cloud Implementation
For banks thinking about moving to the cloud but still wondering what building a cloud strategy involves, here are some key things to consider.
- Digital Data Deluge: A recent McKinsey report notes that nearly 65 percent of banking customers interact with their banks through multiple channels. While most banks have responded to this customer need by establishing multiple channels of communication — mobile, social, chat, email, and so on — they have quickly become overwhelmed with the deluge of data these channels provide. Cloud implementation helps banks gather customer data and store it in one central location, streamlining the communications process as customers move from social media engagement to online chat to call center, for example, and providing customer data in accessible ways for use in future marketing campaigns or customer communications. Without a need to house data on internal systems, banks save money and resources that would otherwise go toward network maintenance by upgrading to a cloud infrastructure.
- Compliance and Communication: One of the main ways banks can benefit from moving to the cloud is by simultaneously ensuring data privacy compliance and communicating with customers through the channels they most prefer. APIs perform a number of functions for financial institutions from helping banks enable identity verification applications like two-factor authentication to setting up click-to-call features on the bank's mobile app. Consider, for example, a bank that increases interest rate earnings on savings accounts. The bank can rely on their cloud-based APIs to send SMS alerts to all customers with savings accounts to notify them of the changes. The SMS can direct customers to a click-to-call feature on the mobile app, which will allow them to speak directly with a branch rep who is provided information about the inquiry prior to the call. In this omnichannel example, cloud-based APIs offer smooth transitions from one form of communication to the next, keeping any data collected during the interaction secure and stored for future use.
- Global Connection: Like most industries, banking has become increasingly more global in the past few decades, with a macroeconomic environment taking the place of regionally-based finance. But with worldwide growth often comes internal disconnection. With cloud-based video and web conferencing, a financial leader in the United States can interact with a colleague in Asia in real time via any device at any time. Cloud-hosted conferencing allows members to share documents and videos, increasing productivity and ultimately saving the cost of traveling from branch to branch. This kind of conferencing and data sharing is especially critical as global banking institutions recalibrate regulations, leaving enterprise banks having to catch up and quickly adjust to changes. Keeping real-time communication across brick-and-mortar branches helps financial institutions stay compliant with quickly-changing regional and global regulations.
- Instant Integrations: Many banking leaders find digital maturation and the switch to cloud overwhelming, seeing existing applications as at odds with upcoming tech. Cloud implementation, though, allows banks to integrate services like G suite, Microsoft 365, and Zendesk to help enhance customer communications and link multiple programs under one centralized service. Cloud, therefore, reduces the headache caused by juggling multiple applications, while simultaneously helping banks give the best customer service available. The Salesforce integration, for example, allows banks to automatically track and log incoming and outgoing customer calls, and it gathers data to optimize the customer experience. Whether a bank uses a large-scale contact center or individual branch agents, the Salesforce integration helps employees tailor their conversations to the needs of the customer and allows them to tag calls according to particular themes. These customizable and recordable interactions help customers build trust in the bank and help the bank beat the ever-growing competition.
As banks move toward digital transformation to stay relevant amongst a global financial market, a strong cloud strategy can make all the difference.
Investing in the cloud can seem like an overwhelming, if not downright scary prospect for banks, especially given the fact that 70 percent of banks will invest in technological upgrades to stay competitive over the course of the next three years, according to EY. As banks move toward digital transformation to stay relevant amidst a global financial market, a strong cloud strategy can make all the difference.