How cloud evolution and adoption is transforming the FinTech landscape in 2021?

FinTech, a dynamic segment established by the combination of the financial services and technology industries, is revolutionizing the traditional financial services industry’s goods and services. The FinTech movement is gaining traction because to cloud technology, which has progressed from trial to implementation.

According to McKinsey & Company, cloud adoption will accelerate in the next years: 25 percent of the key activities of the world’s major banks are currently on the public cloud, and 40 percent to 90 percent of global banks’ workload might be on the cloud in the next 10 years.

According to PwC, public cloud use in FinTech organizations will rise in 2020, making it one of the year’s greatest FinTech trends.

Embracing the digital transformation brought on by cloud technology allows financial institutions to function more efficiently and better meet the expectations of digital native clients by providing convenience, increased accessibility, and tailored goods.

FinTech revolution and influence on market structure of financial sector

The FinTech revolution has several causes, including technological advancements, regulatory changes, and changing client preferences. Despite the fact that banks are located throughout the country, they are unable to satisfy the demands of today’s age, which does not want to line in a bank branch. Users increasingly want simple yet rapid banking procedures on an automated digital platform like Google Wallet or Alipay, thanks to the widespread adoption of smartphones.
Furthermore, the adoption of modern technologies such as cloud computing, blockchain, AI, data analytics, and robotic process automation has skyrocketed. FinTech technologies are being adopted at a faster rate than ever before, affecting the banking and insurance industries all over the world. Furthermore, the FinTech revolution is being fueled by an increase in the number of obligatory laws in the finance industry.

Fintech on cloud

Currently, financial businesses use the cloud mostly for non-essential procedures, but as service offerings improve, the correct technology will be required to perform fundamental activities, with deployment in areas such as consumer payments, billing, and credit scoring, among others.

Smaller banks, on the other hand, have moved all of their key services to the cloud more swiftly. These and other larger banks’ service offerings will thrive in the competitive marketplace as they implement new FinTech, helping to drive the digital transformation race.

How cloud adoption is transforming the FinTech landscape?

The uses and benefits of cloud technology are critical to its rapid acceptance in the financial sector. Businesses of all sizes can benefit from the cloud in a variety of ways, including agility, innovation, cloud savings, and more, as detailed below.

Advanced data management

Today, the amount of financial data is rapidly increasing. FinTech companies can use cloud technology to store and manage data in a secure and reliable manner. It also allows firms to profit from sophisticated loan, payment, and fraud detection technologies.

Leading cloud service providers, such as Alibaba Cloud, offer new cloud solutions for FinTech and banks. It provides financial institutions with a highly secure platform, innovative architecture, and customisable services that enable them to provide excellent customer service.

Seamless cloud migration

Many businesses choose a hybrid security architecture, in which the cloud coexists with current infrastructure. Many companies are using a hybrid architecture to construct cloud-based sandboxes in order to swiftly test customers’ approval of new service offers without disrupting their current operations. When redundancy and resiliency are the primary business concerns, the cloud can help mitigate the risks associated with traditional infrastructure technology.

The scalability of the cloud also gives banks the ability to scan thousands of transactions per second, which improves the company’s ability to tackle financial crime such as fraud and money laundering.

Security

According to Information Age, 42% of financial services companies are lacking in information security expertise. As a result, CISOs’ primary focus is information security. Cloud applications, when correctly installed, give roughly the same level of security as traditional deployments.

Alibaba Cloud, for example, ensures that its cloud services meet the regulatory and security requirements of financial institutions. They can be used by businesses to improve data security.

Competitive advantage through agile innovation

By enhancing agility and productivity, the cloud improves a financial firm’s ability to innovate. When opposed to the previous paradigm, a company can swiftly enroll services. With the cloud, releasing a new service to the market is simple and secure. Furthermore, services can be scaled up or down quickly, allowing firms to reallocate resources, innovate, and quickly deliver products and services to market.

Zero CAPEX, reduced OPEX

On-premises data storage necessitates the purchase of expensive in-house gear and software. Cloud storage solutions, on the other hand, are owned and maintained by third parties, which lowers the entire initial capital expenditure and operational costs involved with server upkeep.

ZNetLive’s managed Alibaba Cloud services offer a variety of cost-effective options. There are pay-as-you-go choices and low-cost subscription services available, allowing you to choose the best price strategy for your organization.

Conclusion

Cloud computing is quickly gaining traction as a key driver of global digital disruption, particularly in the financial services and banking industries. In the FinTech business, the cloud is a critical platform for accelerating innovation.

It is critical to use this technology, regardless of the size of your company, to ensure corporate security, continuity, and regulatory compliance.