The age of intelligent cloud computing is upon us. No longer should we rely on outdated legacy systems and overnight batch jobs to meet the needs of modern, mobile, and increasingly digital-first customers. It is essential that retail banks adapt their services to respond to these needs whilst maintaining the necessary levels of security, resilience and dependability.
Demystifying the cloud
Cloud services are categorised into three service models, each offering varying levels of support and capability:
· Infrastructure as a service (IAAS): “here is your land, now build your bank”
IAAS gives organisations access to a virtualised infrastructure within which to build their own IT platforms
· Platform as a service (PAAS): “here is the land and the building – kit it out as you need”
PAAS combines the ability to use vendor tools to develop individual software applications with the benefits of instant upgrades and only paying for what is actually used
· Software as a service (SAAS): “here is the land, the building, the fixtures and fittings that you need – use it as you like”
Fully managed by the vendor, and the organisation accesses predetermined applications on demand
Private v public
The next decision for the procurer of cloud services is whether the cloud environment will be public or private – in other words, where your data will be stored. With a public cloud, multiple users have data stored on the same server (protected by passwords). Private clouds, on the other hand, ring-fence a suitable area in which only one organisation’s data can be stored.
Private clouds deliver the proximity to data that traditional infrastructures have given in the past – a more comfortable position for banks in terms of control and security. However, this has the downside of higher fixed costs. Public clouds have access to unlimited resource, resulting in instant scalability and reliability, which can be accessed remotely from any location.
The decision need not be all or nothing. A hybrid approach is entirely plausible, enabling banks to keep some data-sensitive services private while making less sensitive services public, thus delivering both maximum security and flexibility.
I recently read a CIO UK article in which Richard Williams floated the idea of a “community cloud”, also recognised as a public “sovereign” cloud. Richard’s suggestion of a dedicated financial sector cloud could overcome many of the regulatory barriers that public cloud resources present, enabling the implementation of public cloud features coupled with the security, visibility and control that only private networks have traditionally delivered. Working collaboratively, the financial sector could develop a safe environment, providing a basis from which banks could individually mould unique services that create competitive advantage, while all the time offering the security that maintains levels of customer confidence.
The expectation for services
Adopting cloud services for retail banking provides the potential for a faster, more responsive, and more personal service. Cloud enables all parties access to more information, which in turn enables better decisions to be made (by both the customer and the bank). Once networks can communicate effectively, they can do so at speed, cutting down waiting times and reducing transaction times and costs.
As consumers use cloud storage in more areas of their lives, they will expect the same value from other service providers, including banks. Consumers will expect information and insight to be available to them in an instant, regardless of location or device, with embedded intelligence.
With the introduction of Apple Pay, and with it the ability to pay for goods and services at the touch of a finger, how long will it be before that fingerprint is authorising not just the release of funds for payments, but also approvals associated with personal data, or sensitive documentation stored online in a secure vault? This could include legal and financial agreements, mortgage deeds, or maybe just the personal data that moves your mortgage application towards completion, without having to make a quick trip to the branch during your lunch break.
Imagine the potential value of an always-on, always learning, helpful virtual personal assistant. Or cloud-based intelligent systems, responsively learning and processing vast amounts of data at scale. We are seeing the future with Cortana and Siri already, and the head of this intelligence is firmly in the cloud.
Shifts in expectation will drive rapid developments. Consumers will expect computer systems to talk instantly, to connect the dots of their whereabouts and actions, and to make decisions for them to approve.
Personalised, digital relationships
Will this lead to a demand from consumers to upload their own data to the cloud, making the bank play host? One prominent UK bank is leading the way here, already offering their customers storage space in the bank’s own cloud IT service.
What a fantastic opportunity to get to know customers on a profoundly personal level. If access to social media profiles was also granted – to enable trusted brands to be in tune with customers’ social moments, purchasing habits, and lifestyles – banks would be in a much stronger position to create and offer customised services, rewards, loyalty offers and predictive, virtual personal assistance. And all of this could be delivered at scale from the cloud, to the point of need, in an instant.