September 08, 2023
Cloud computing has created a lot of buzz in the IT industry in the recent years, every other online business/company is rushing to get a cloud based service. All this hype around the cloud is not false, since it provides a lot more cost effectiveness and efficiency than regular services. Likewise, the companies in banking and the finance sectors don’t want to lose the piece of pie and hence have started investing in cloud computing. As we mentioned earlier the cloud has a lot more benefits over traditional computing services.
The cloud is basically a remote server used for storing, processing and managing data over the internet as opposed to a local server. Secure storage, huge storage space, interoperability, and availability are some of the perks that the cloud offers over traditional servers. Cloud computing with its flexibility and agility has helps bring about a transformation in the banking and finance industry. Here are a few things that the cloud has brought into the fintech industry. But before that let us look at cloud options available to us.
- Software-as-a-service option: SaaS is a method by which a software is delivered on-demand or on subscription basis over the internet. A complete product is provided to the user, which is run and managed by the service provider. Accounting, service desk management, customer relationship management, human resource management, invoicing and content management software are delivered using cloud. This helps make processes streamline and seamless, as well.
- Platform-As-A-Service: When an organization opts cloud computing as PaaS it gets the benefits of on-demand testing, delivering, developing and managing applications. The service eliminates the need for organizations to manage the underlying infrastructure themselves and rather focus on management and deployment of the apps. PaaS is quite a complicated process though it does have certain similarities to SaaS with the major difference only being that it is offered as a platform rather than an online software.
- Infrastructure-As-A-Service: In an IaaS the organization gets access to networking features, computers and data storage spaces, which are the basic building blocks of cloud computing. In IaaS the user gets virtual machines, IT infrastructure-servers, storage space, and operating systems which are enabled with IP-based connectivity as an on-demand service.
Here is how clouds have impacted the fintech industry:
- Improved Data Management: Cloud computing offers a more secured and trusted way to store and manage data for banking and finance businesses. It also helps in streamlining the huge amount of data that is generated by the fintech industry in today’s day and age. It also helps in more secured transactions and fraud detection.
- Operational cost reduction: In our previous articles we have mentioned why investing in an on-premise IT infrastructure is a bad idea. It is not all that different even for big banking and finance companies. On-premise IT infra does have a lot of unnecessary costs to go with it. Adopting a cloud server eliminates the cost of maintenance, upgrades and other measures that come along with an on-premise IT infrastructure.
- Reliability of the cloud: Businesses like banking and finance need a lot of security and for obvious reasons. Apart from security the next most important thing for such businesses is the reliability. Cloud computing is known as much for its reliability as its efficiency and also a top Cloud Computing service provider offers the necessary support. In case of emergency having saved everything on a physical server is not only unreliable it is also risky. Cloud Computing helps protect data in such situations as it is stored on the internet but working with a reliable service provider is also important. In conclusion we’d say that the cloud has made it possible for fintech companies to improve their businesses and offer services at lesser costs.