Small banks. Big opportunity

But the cloud computing model changes all that. And puts innovation and the allied benefits of technology well within reach of all banks. 

  

There are a number of reasons why the cloud model should be relevant to small and medium banks, not least of which is cost. In the cloud, investments in computing and storage are shifted from a CAPEX model to an OPEX one in which there are no  (or minimal) upfront investments in infrastructure, software, maintenance or space. It also allows for the discrete addition of IT resources as a ‘pay as you use’ feature.Apart from avoiding huge license fees, they can also scale solutions as they grow.

  

Because products/processes are built into the solution, implementation time frames on the cloud are much shorter than those of conventional on-premise core banking systems. Deployment only entails a quick modification of the base to fit individual requirements. Accessibility is also vastly improved as customer data can be accessed instantly at any location to speed up service times. 

Since infrastructure and IT management are now the vendor’s responsibility, bank staff can focus on revenue maximization opportunities like up selling, cross selling and customer service.

So, CAPEX is slashed and OPEX is rationalized by the more efficient use of IT infrastructure. But the larger potential in the cloud model is that it enables business agility. Development and testing schedules are compressed by the on-demand availability of tools and resources. The instant availability and scalability of infrastructure also means faster time-to-market for launching and supporting new products and services. 

Data analytics is probably the biggest competitive advantage that banks can seize from the cloud. And thanks to cloud banking, even small and mid-sized banks can profit from understanding customers better and delivering tailored solutions faster.