The ongoing FinTech revolution is driven by a number of technologies—Artificial Intelligence, Machine Learning, Robotic Process Automation (RPA), and blockchain, among others. Banks and FinTech startups are leveraging them to improve their products, build new ones, and take financial services to new levels of efficiency and cost-effectiveness.
Another technology that’s undergirding the progress of FinTech is the cloud. It’s thanks to the cloud that teams in financial service companies can collaboratively build new offerings. And it’s what enables people who use those applications to access their accounts from wherever they are.
But the cloud isn’t just supporting the financial technology industry. It’s transforming the whole space. Here are five ways the cloud is powering change in FinTech.
Data Storage And Management
Banks and FinTech startups typically have to collect, store, and work with huge amounts of data. And the volume of data they handle only grows as they gain more customers. In a world without the cloud, these organizations will have had to keep their data in unwieldy hardware (as was the case in the past).
The cloud has potentially endless ‘room’ for data storage and supports computation at a massive scale. So it’s just what FinTechs need to make the most of the data at their disposal.
Teams within FinTech startups are utilizing cloud applications to manage their processes from wherever they are. This comes with a lot of benefits. For example, it allows them to manage projects round the clock, and provide robust support to customers from wherever they are.
FinTech platforms that are built on the cloud also enable users to access their accounts and manage their finances at any time and place. And the engineers who manage those platforms can also make application updates available to users fairly quickly.
FinTechs grow at a rapid pace, so they need to be able to scale their resources quickly as well. If they can’t, they’ll struggle to operate efficiently. This may result in late deliveries, unfulfilled promises, and poor customer service. In the end, their sales and revenues could take a hit from this.
Thankfully, FinTechs can scale resources quickly on the cloud. They can increase or decrease the cloud capacity that they use as demand grows or lessens. This flexibility lets them streamline their operations and services to meet customers’ needs.
Before the cloud became widely accessible, banks had to acquire more storage and compute capacity than they needed, and hope that they’d use the dormant capacity when demand was high enough. This meant that they spent more money than they had to.
There’s an alternative to this in today’s world. Banks—and FinTech companies too can simply purchase just the right amount of storage and compute capacity from cloud service providers. They don’t have to buy hardware that’ll remain idle until there’s demand for them. This has substantially reduced the costs that banks and FinTechs incur on this sort of thing.
The collaborative work and computational efficiency that the cloud makes possible both set the stage for innovation to happen. And we’ve seen a lot of cloud-enabled innovation in FinTech in the past few years.
The cloud lets FinTechs ship their products to their target market fairly rapidly. It also allows them to adapt to changing trends much quicker than they would without it. One instance of the innovation that clouds technology drives is automated service, including fraud detection and credit scoring. These tasks require significant computing power—something that the cloud delivers.
The cloud is at the heart of FinTech’s constant evolution. It is changing the way people access and engage FinTech platforms, and how those platforms respond and operate. The coming years will see even more transformative innovation coming in the wings of greater cloud adoption.
Featured Image Source: Businessday NG
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