The impact of cloud computing in fintech

Cloud computing in fintech is an accelerating trend driven by the powerful impact cloud is having on answering many of the financial sector’s requirements. The cloud has brought numerous advantages to the financial sector across many areas including security, service, innovation and scalability. Cloud has even been credited with helping grow the sector’s forecasted compound annual growth rate of 23.84%.

So why is cloud computing so important in financial services? Fintech start-ups and established financial organisations are racing to provide customers and end users with more speed, reliability and 24/7 uptime in their digital products and services. Cloud computing enables all of this in a cost-effective manner while also providing additional security in an age where regulatory compliance is becoming increasingly stringent.

How cloud impacts the financial sector

Advanced data management

Data is the lifeblood of the financial services industry. It is crucial to a diverse range of activities, from everyday account management to verifying user identities, displaying balances and analysing spending habits. Cloud technology allows fintech companies to store, manage and access huge volumes of data securely, cost-effectively and autonomously, from anywhere and at any time.

Accelerated innovation

The agility that cloud computing has brought to the fintech industry has accelerated the sector’s innovation. Cloud enables financial organisations to develop their products and bring them to market with more speed, while also allowing them to react quickly to changing demands and emerging trends. The Covid-19 pandemic brought many challenges to the fintech sector which cloud computing has helped financial services companies overcome with speed and ease.

Enhanced security

In the age of high-profile data breaches and cyber security attacks, customers are becoming increasingly aware of how their personal data is protected. The financial services sector has a responsibility to safeguard the data of its customers and the cloud is enhancing the way financial businesses do this. From data encryption to zero trust verification and access control, many of the risks that traditional on-premises IT infrastructures present are being mitigated through cloud computing in financial services.

Greater scalability

Rapid growth is common in fintech companies and these fast-scaling businesses need infrastructures that support their growth instead of slowing it down. Cloud infrastructure allows financial companies to scale quickly and easily without barriers. From fast-growing customer bases to digitising traditional banking services, financial businesses often need to store additional resources in the cloud, which is far more cost-effective than it would be to upgrade or expand traditional on-premises infrastructure.

Best practices for cloud computing in financial services

There are various considerations that organisations should keep in mind to experience the best impact of cloud computing in fintech. Here are a few key considerations for financial services stakeholders involved a cloud adoption journey:

Demonstratable compliance

Stakeholders within the financial organisation should request proof of compliance from cloud providers such as ISO 27001: Information Security Management System certification, ISO 22301: Business Continuity Management System certification and PCI: DSS Payment Card Industry Attestation certification.

Access control and encryption

When it comes to cloud computing in financial services, your chosen cloud provider should also be able to offer robust access control and data encryption policies. Before selecting a provider based on these policies, it is important to ask how they will work for your specific use cases to ensure all financial data will be effectively safeguarded.

Disaster recovery

Any cloud infrastructure requires a robust disaster recovery plan. Any cloud provider worth working with will have a disaster recovery plan so it is important to understand how it will work when your organisation has it in place.

The future of cloud-based financial services

The financial services sector has revolutionised the way customers interact with their products and services over the last few years such as the growing demand for big data, adapting to increasingly stringent regulations and a rising number of smaller players competing with established financial organisations. We can expect to see plenty more innovation from the sector in the near future.

We can also expect to see various developments through the impact of cloud computing, including predictive modelling to prepare for ‘what if’ scenarios, automation of front-end sales and customer-facing environments and customer care being enhanced by self-service functionality.

Cloud computing in financial services

Cloud computing is an important enabler for fintech companies. It allows organisations of all types and sizes across the financial sector to build scalability and flexibility into their business models, helping them to achieve agility and remain competitive in a rapidly changing marketplace. Finance businesses can also look to cloud computing to improve security, adapt to strict compliance requirements and simplify their traditionally complex infrastructures.

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