Inside cloud for financial services

Financial services companies looking to provide an excellent customer experience, keep up with evolving industry standards, optimize their operations, and gain a competitive edge have increasingly embraced the cloud. Here’s what you should know about the cloud transformation and choosing the right cloud provider for your business.

In recent years, customer expectations have risen to record heights and financial services companies have found themselves needing to adapt or die within this new reality. Bells-and-whistles features, such as the ability to conduct transactions and speak with company representatives through an app, are now par for the course.

The pandemic saw face-to-face meetings swapped for virtual interactions, and that shift to digital interaction further cemented customers’ preferences to connect with financial institutions from the comfort of their devices. Intuitive and flexible customer-facing interactions conducted through apps and websites have become the industry standard, rather than an experience reserved for VIPs.

That’s not to mention that the financial services landscape is increasingly competitive, as companies battle to offer the most attractive features and technologically advanced solutions to gain an edge with customers and stand out in a crowded market. Organizations that aren’t providing a stellar customer experience may find themselves losing business and being left behind. 

Financial services companies looking to stay relevant and keep up with these new customer preferences and evolving industry standards are seeking ways to streamline workflows and boost their customer experiences. They also need to protect themselves from the very real risks of cyber attacks and data breaches, as well as remain in compliance and fight fraud.

For many financial companies, cloud technologies offer the pathway to achieving these goals

Cloud migration emerged as a godsend for organizations during the early days of the pandemic. These solutions and technologies provided a way for financial services companies to move their mission-critical applications and services to a decentralized location, making it possible for employees to work from home and for ensuring that vital daily operations were able to continue functioning as usual.

While cloud technologies enjoyed rapid, widespread adoption during the pandemic, the appeal of the shift to cloud isn’t fading, even as companies resume in-person working and normal office hours. According to a recent CEO Outlook survey by KPMG, nearly half - 44 percent - of global banking CEOs are prioritizing secure cloud-based technology infrastructure as a key step to future-proofing and building digital resilience.

Overall, 40 percent of CEOs expressed similar sentiments about the cloud, indicating that financial services companies are recognizing the importance of the technologies at higher rates than their counterparts in other sectors.

Cloud implementation can help financial institutions cut down on the capital expenditures that typically accompany on-premises technology systems. A cloud-based system also means easier software updates, which administrators make an automated and a hands-off process. The cloud creates an environment in which operational efficiency can be seamlessly streamlined and processes made smarter, as changes or new solutions can be rolled out across the entire network at once.

Companies may also consider integrating artificial intelligence solutions within their cloud-based systems. Gleaning insights from cloud systems is far simpler than attempting to do so via on-prem systems, and companies can leverage the cloud to create connected data sets to unlock actionable analytics and insights. The cloud serves a single source of truth for critical information, helping combat data silos and ensure that everyone within an organization has access to pertinent data and can remain on the same page

However, financial services organizations may struggle to make the most of their cloud investments and delay fully embracing cloud technologies for a number of reasons, including concerns around data security and compliance. Some organizations are worried about the risks associated with relying on external providers to protect data, rather than internal security systems.

More and more providers, including industry titans like Microsoft, now offer cloud technologies with built-in security, trust, and compliance features, as well as infrastructure that can help companies detect emerging threats early. However, a degree of caution regarding expanding your company’s reliance on cloud technologies is reasonable, and organizations must proceed with security and data protection as top-of-mind concerns.

It’s important to understand that cloud technologies are not a one-size-fits-all solution. Financial organizations need the right services that are tailored to their unique needs, legal requirements, customer base, and more. It’s critical that you carefully select the right strategic partner(s) for your cloud transformation. You’ll need a partner with real-world experience and sector-specific capabilities, along with a solid track record of working with companies specifically in the financial service space.

You should identify whether it makes the most sense for your business to be on a public, private or hybrid cloud. Due diligence regarding the capabilities of a potential cloud provider and their data privacy strategy is extremely important. You should know how a cloud provider controls for privacy, including encryption and access privileges, and their disaster recovery plans, as well as their service level agreements.

With regulations around compliance constantly evolving, you should be sure that your cloud provider has a solid method for staying abreast of any changes in legal requirements, and whether they have industry-specific certifications.

KPMG is proud to be a part of Microsoft’s select partner ecosystem for their Cloud for Financial Services, working to drive transformation tailored to the finance industry’s requirements. Microsoft’s secure cloud platform provides organizations with a safe way to store their data, streamline their operations, improve their customer experience, and gain critical insights into their company’s functioning.

KPMG brings our financial services expertise to the four capabilities of the Microsoft Cloud for Financial Services: creating a unified customer profile, improving customer onboarding, increasing banking customer engagement, and managing collaboration across front and back offices.

We’re leveraging our KPMG and Microsoft Digital Investment Hub to create and develop crucial sector-specific solutions that address the real-world challenges facing financial services businesses today. Utilizing our deep knowledge and decades of expertise in risk, regulation, compliance, and cyber security, KPMG offers several solutions built into Microsoft Cloud that help financial service companies reap the benefits of the cloud, securely.

“As financial institutions look at ways to better serve their clients and empower employees, while at the same time continuing to reduce costs, there is a strong focus on the use of digital tools and cloud technology,” says Bill Borden, Corporate Vice President of Worldwide Financial Services at Microsoft.

To make the most of your cloud investments and optimize your organization’s internal structures to best adapt to changing customer and market needs, consider partnering with KPMG and Microsoft Cloud.

This article is based on an article published at KPMG global by Judd Caplain, Leadership | 1 November 2021