Why cloud-based digital banking solution is necessary

Financial institutions have benefited greatly from cloud-based digital banking systems since they can now scale easily and adapt to changing needs. Fintech businesses perceive a number of possible risks despite the benefits appearing to be very real.

In this article, SMARTOSC Fintech will analyze the issues that clients have while pondering the dependability of a cloud-based digital banking solution.

What is Cloud-Based Banking?

This is an external system that the bank uses to provide consumers with remote services. Any retail bank gives its clients the option to get financial services remotely by connecting to a cloud service. 

An Internet-connected device and a login and password are all that the end user needs to access the service. How can a bank decide whether to use an external service or build the RBS system internally? 

The bank’s medium- and long-term goals, the economics of implementing and maintaining the remote banking system, the availability and opportunities for the formation and development of the necessary competencies on the bank’s side, as well as other factors, cloud-based digital banking solution will all be significant parameters for the analysis.

Benefits of the Cloud for Banking

Cost Savings

IDC Financial Insights estimates that in 2019, the major banks in the world saved $15 billion by implementing cloud technology and cut the cost of their IT infrastructure by 25% with cloud-based digital banking solutions.

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The fact that cloud solutions are backed by a microservices architecture is one of its key benefits. On adaptable cloud infrastructure, such as serverless infrastructure, applications and solutions are operated. This enables the creation of a geo-distributed architecture, the efficient distribution of server load.

With the help of the cloud-based digital banking solution, fintech may easily and swiftly make any future modifications or advancements without disrupting other system components. 

However, developing such an architecture for new, small, or medium-sized businesses would be expensive and probably never profitable. This kind of ecosystem must also be designed and built by highly qualified IT personnel.

Fraud Detection

When assessing cloud-based digital banking solution providers for Core Banking software, it is important to consider experience with financial sector regulators, including platform compliance with industry standards, legal requirements, and verified regulator use of the platform..

Numerous commercial cloud banking platforms are being created to satisfy local needs. In actuality, financial services regulators must examine and certify any new platform. Additionally, regulations impose standards for risk management, information security management for IT systems, outsourcing standards for third-party cloud service providers, etc.

Higher Level of Disaster Recovery

When managing servers and networks, it’s crucial to establish a high degree of security in order to transport data safely in the cloud and prevent unwanted access. Regulations mandate that banks and fintech companies understand where their data is stored physically and how it is shared in the cloud-based digital banking solution. 

Many well-known IT security certifications are held by today’s data centers, and their systems are tested to the highest industry standards. As an illustration, the Azure platform, which drives our cloud banking products, has established a strong backbone based on top-notch international infrastructure.

As a software supplier for banks and cloud businesses throughout the globe, cloud-based digital banking solutions can suggest that banks start by putting the needs of the present and potential clients first. Making the best decision will mostly depend on the understanding of the customer profile, the duties, and the expectations from the provider. Do not hesitate to contact SMARTOSC Fintech if you have any questions or issues.