Demystifying the move to the cloud is the first step to becoming more agile
If there was any doubt the future is in the cloud, the world’s response to COVID-19 has provided compelling evidence. As we’ve adjusted to social distancing and precautionary shutdowns, capabilities like virtual meetings, distance learning, contactless shopping, telehealth and Supply Chain 4.0 have enabled us to stay safe, remain productive and maintain some sense of “normal.” There’s been an unprecedented surge in the use of these tools. And they all have something in common – they’re enabled by the cloud.
For financial institutions to nimbly deliver the kind of experience consumers increasingly expect, they too must embrace the agility that can be gained through the cloud.
Cloud-based banking comes of age
Cloud-native strategy is far beyond the proof-of-concept phase. Rapid growth of cloud infrastructure and years of use have confirmed and strengthened the cloud value proposition, and it’s reached an exceptional level of reliability.
Because of its growing adoption rate, the cloud technology in production today, along with the open-source technology and tools around it, has reached a maturity level and trust that could previously be delivered only by costly, proprietary options. As the financial industry continues to move toward the cloud, it inherits the benefits of this maturity.
Early adopters and tech-savvy financial institutions are already deep into the process of adopting a cloud-native strategy. Still, many financial institutions have yet to dive headfirst into cloud-based banking. But they have reached critical mass when it comes to non-core services. Cloud-based services and applications in customer relationship management (CRM), travel booking, human resources (HR) functions, marketing and procurement have become a common cloud entry point for the industry. Financial institutions’ experience with these cloud-based, software-as-a-service tools provides an insightful baseline for expanding to the banking operation.
Overcoming obstacles to adoption
Like any transformational technology, taking advantage of the promise of the cloud requires a philosophical and operational shift. If financial institutions identify obstacles, they’re typically in three key areas: comfort and confidence, resource management and interoperability.
The paradigm shift from a legacy to a cloud-based environment is a significant one, and fear of the unknown can undermine comfort and confidence, quickly stalling cloud conversations. Frequently, sources of a financial institution’s hesitation are based on misperceptions about the cloud. First, it’s the “all-in” perception – the assumption that only when you can shift the entire enterprise to the cloud are you ready to make the transition. In reality, migration to the cloud can be – and often is – gradual.
Financial institutions may also dismiss the cloud as not secure enough for the data with which they are entrusted. In reality, data in the cloud can be as secure as or even more secure than it is in an on-premises model. And multiple cloud options – private, public and hybrid – can help financial institutions balance risk by enabling organizations to mix and match – and decide where their data live – based on their specific needs and/or local regulation. Large enterprises are beginning to lean into the hybrid option, bringing in private infrastructure as the base and scaling to public, as needed.
Resource management can also present obstacles for financial institutions with cloud aspirations. Similar to its banking transformation predecessors, migration to the cloud requires planned investment of human and financial resources. Internal alignment across leadership, operations and IT is critical to identifying and allocating needed skill, staff and budget. Trusted partners can help fill gaps and bring enormous return on investment in the form of increased efficiency, speed of innovation and long-term cost savings.
A financial institution’s operational infrastructure is a core element of a cloud-based model, and aging, legacy infrastructure is an obstacle. Cloud-based technology – such as software built in the cloud – can help leapfrog legacy infrastructure, bringing together existing technology with future-ready options. This approach allows financial institutions to begin to take advantage of cloud-based capabilities, while modernizing critical operational components in parallel to quickly advance their technology road map. Cloud readiness is yet another proof point for the importance of banking transformation.
Diebold Nixdorf works with financial institutions to overcome these obstacles. Our proven solutions use APIs and cloud-native technology to create an open, standards-based platform to modernize financial institutions and create dynamic ecosystems for today’s digital-first, cloud-enabled environment. Such solutions, coupled with managed or as-a-service partnerships, can help financial institutions overcome the resource and technology obstacles that can slow or sideline cloud-based opportunities.
Leveraging the cloud to become more agile
To meet consumers’ ever-increasing expectation for on-demand, digital-first services, financial institutions must be adaptable, ready and able to move quickly. They must be, in a word, agile
Today, agility is built in the cloud. And that is leveling the playing field, giving financial institutions of every size and mission the ability to maximize the consumer experience, while at the same time reaching new levels of operational efficiency. It’s time for banking to boldly go into this cloud frontier. It likely won’t be the last we have to conquer.
Learn more about how Diebold Nixdorf is enabling cloud-based strategy through cloud-native, cloud-first solutions with DN VynamicTM Software
First appeared in FintechFutures