Innovation in Fintech is booming and ideas are continuously being explored and implemented rapidly. This has resulted in the need for Fintech companies to use a variety of technologies, including artificial intelligence (AI), big data, robotic process automation (RPA), and blockchain. Implementing technological innovations in any organization comes with several prerequisites with top considerations being agility, scalability and security. The cloud option, for instance, was mostly perceived as a convenience due to the relatively shorter time-to-market. Yet, there were constraints in terms of customizability, functionality and security. Therefore, only few industries adopted the cloud initially, while those like BFSI were hesitant. Today, however, cloud offerings across the globe not only have addressed these constraints but also have matured to provide low cost adoption, global access and hybrid models to take care of concerns like security. Therefore, cloud has become a necessity!
FinTechs largely work in B2C and B2B2C segments that demand scale in terms of consumer onboarding and data processing. They also collaborate across industries including the traditional banking sector that is conservative in terms of data and privacy which makes it imperative for FinTechs to adopt cloud and hybrid models. More significantly, cloud provides the best in class infrastructure for FinTechs to leverage emerging and disruptive technologies like AI, Big Data and Machine Learning to stay competitive, by, for instance, providing automated, predictive modelling to their customers, rather than reactive systems.
Financial institutions can consider cloud technologies after a thorough due diligence. While cloud computing comes with several advantages, taking a few cautionary steps to ensure data governance, resilience, security, and compliance, among others, is important to realize end goals. A recent Financial Stability Report from the RBI specifically mentions cybersecurity risks arising from remote working and therefore, this is critical to consider while adopting Fintech Cloud.
Organizations with legacy, monolithic infrastructure find it difficult to onboard new solutions or re-calibrate existing solutions to meet new age digital requirements. Complex integration involves a lot of time, cost and effort, which can be tackled by taking a two-step process of first adopting to a hybrid model and then moving to a complete cloud infrastructure. A well-thought-out cloud strategy can enable such organizations to quickly regain market share reboot and excel.
We foresee a few trends emerging in the cloud computing space like Edge Computing that enables data localization, and Serverless Computing that enables micro customization and improved return on investments. Cutting edge technologies including AI, Blockchain, Big Data and Machine learning are further expected to thrive on cloud infrastructure. Another trend anticipated is to work with multiple and hybrid cloud infrastructures with no vendor lock.
To conclude, the cloud option provides a huge boost to digital transformation, from three viewpoints –Business (Faster time to market), Technology (addition of new functionalities/modules) and importantly, Finance (Cloud lends itself useful in converting massive Capex to ongoing Opex).