I will look at how digital can support banks in their quest to remain competitive, in terms of regulation, efficiency and scale as well as how new approaches to cloud are enabling bank success in our developing, digital world.
written by Ross Mallace, Head of Cloud – APAC
Digital is more than an opportunity for banks, it’s about to become a way of life.
Bank customers expect it, particularly Gen-Z. Born between the mid-1990s to early 2000s, it now accounts for more than a quarter of the world’s population. In the developed countries and urban centers of APAC, this is a generation which only knows the connected world.
In fact, according to a recent report by Tech Research Asia, 70 percent of China’s Gen Zs buy products directly from social media and 69 percent regularly use mobile banking apps, a trend that is only set to continue growing throughout the region.
Regulation needs digital
Digital isn’t just about customer demand, though. Regulations such as open banking and real-time payments demand a digital infrastructure to deliver these efficiently and effectively.
Digital infrastructure is essential as these innovative new services gain traction within APAC. According to a recent survey by Accenture, 63 percent of banks in APAC view open banking as more of an opportunity than a threat.
Open banking is expected to increase real-time digital payment volumes dramatically by centralizing account information and payment options into one unified mobile application.
This enables users to conduct day-to-day banking on a platform provided by their bank or an innovative fintech. However, to enable value realization, open banking needs a digital infrastructure.
Increased scale needs digital
With digital comes increased transaction levels and requirements. As more solutions use data analytics, banks need greater computing power and are turning to the cloud to supplement or enhance their on-site core systems.
A great example of this is banks looking to run financial crime mitigation software to screen and profile large amounts of data being generated from transactional data and customer interactions with financial services.
Digital efficiency needs cloud
The benefits of a development platform in the cloud stretch beyond just supporting innovation. It includes infrastructure ie. servers, storage, and networking, but also middleware, development tools, business intelligence (BI) services, database management systems, and more.
This approach also allows banks to avoid the expense and complexity of buying and managing software licenses, the underlying application infrastructure and middleware or the development tools and other resources.
Cloud can support digital in terms of scale and efficiency, however, in this new, digital environment, being able to compete also means offering your customers the solutions they need as soon as they need them. In my next blog I will explore this further, reviewing the true control that developing solutions in the cloud can bring.
Being ready for digital is essential, and whilst cloud underpins the efficiency that’s needed to achieve the benefits associated by this new environment, it offers so much more. In part 2 of this blog I will explore the importance of cloud to support digital innovation and why banks need cloud to survive.