COVID-19: changing the rules of engagement
For many years, banks and financial institutions have been reluctant to adopt cloud technologies. The root of the banking industry’s problem is the reliance on outdated IT infrastructure. This cripples the industry’s ability to provide its customers a service they deserve, best demonstrated by IT outages at some of the most prestigious banking and financial institutions.
Legacy issues have become even more visible during the COVID-19 outbreak. The pandemic has accelerated a change in customer attitudes and behaviors towards online and in-app banking. New services or products are demanded in matter of hours and days. This is expediting the need for the banking sector to implement digital technologies to cope with the surge in demand.
It’s clear that COVID-19 has accelerated the need for digital services. At a time when customers aren’t able to visit their local branches and spend hours waiting for their call to be taken by the customer service team, online customers require quick access to their bank accounts and financial products remotely.
As a way of addressing these changing expectations, cloud native technologies and services have developed extremely rapidly over the last few years, with core banking a fundamental component in bank’s technological architecture.
Cloud native technology: keeping banks relevant
So, why is a cloud native banking system important? Cloud native technology enables banks and financial institutions to scale accordingly to their customer needs, launch new products and services while keeping operational and investment risks low. It also enables banks to stay flexible, agile and secure with their customer data.
As financial institutions need to provision additional credit facilities to support in the COVID-19 crisis, extensive flexibility of cloud native core banking could make a substantial difference. The lack of this technology at the moment is hampering global economies, as current technology is not able to keep up with demand and time is slipping.
With cloud native banking technology, banks are able to seamlessly provision for emergency products and services such as loans whether corporate lending and credit facilities, or leasing agreements like hire purchases and equipment financing, which are particularly important for smaller businesses.
Cloud native banking also makes it easier for banks to make changes to existing loans and repayments. Being able to provision for changes to loan agreements can be the difference between a business surviving the crisis or going into administration – time is of the essence and banks need to respond quickly.
Improving the customer experience
They say that necessity is the mother of invention, and it’s not only today - during a crisis - that banks will need to be flexible and agile. With cloud banking technology, the ability to better consolidate and integrate the full spread of lending and leasing products – offering them to customers via a single platform will become tomorrow’s reality.
The opportunity to offer quotes in a timely manner, will ensure high levels of customer satisfaction. At the same time, banks have the ability to offer customers flexible savings and deposit accounts – including multi-currency options, and service those customers looking to secure a mortgage with a full range of end-to-end services.
To ensure the survival of traditional banks, they must focus their attention on updating their legacy systems and harness the benefits of a cloud native core banking system, to respond to the rapidly changing demands of their customers and adapt to the new ‘normal.’
Banking in the cloud is an opportunity for banks to stay relevant in these changing times and to retain their customer base, to ensure business continuity and prepare them for the future.