In a constantly evolving business landscape, the global COVID-19 pandemic has only accelerated the need for companies to become agile and adaptive like never before. Specifically, Financial tech companies need to start implementing strategies to meet the changing consumer expectations, emerging technologies, and alternative business models. With CIOs and CTOs embracing change, cloud solutions are increasingly getting center-stage. We are going to discuss the main reasons why FinTech firms are implementing cloud computing solutions across workflows.
Cloud computing has significantly redefined and transformed how business technology is employed, bringing a huge opportunity for finance operations. And we’re not assuming. Data supports it: cloud spending increased 37% to $29 billion during the first quarter of 2020. Cloud solutions free the finance operations from administrative tasks, helping them gain back valuable time from time-consuming and repetitive tasks while giving them an excellent opportunity to lead digital transformation.
The Future of Financial Tech Companies
In the future, the finance operations still must face many challenges and opportunities to transform digitally. FinTech firms need to discover new ways of working, using robust technology and tools, and invest in Fintech development services to deliver strategic objectives. Meanwhile, they also need to save costs wherever possible and ensure business continuity.
Currently, one of the primary focus areas for every Fintech company should be the modernization of its manual, out-of-date processes to the cloud. According to Protiviti’s recent annual Finance Trends Survey, 72% of CFOs and VPs of finance made cloud computing solutions a top priority to address in the coming year.
Cloud solutions also enable the finance function to become fully remote over time. A recent Gartner survey of 317 CFOs and finance leaders revealed that 74% of companies would shift at least 5% of their existing on-site workforce to permanently remote positions after the COVID era.
Key Benefits of Cloud Computing Solutions for Finance Operations
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Lowers IT Spends and Workloads
According to Gartner’s report, over 90% of a typical IT budget is spent on maintenance, which leaves only 10% to drive innovation, digital transformation, and business process enhancement. Moving core finance operations to the cloud helps Financial Tech companies to lower IT expenditure. Besides, it also shifts the IT budget from maintenance to digital innovation and helps organizations to focus on the implementation of vital finance initiatives such as optimizing workflows, creating reports, and revenue recognition.
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Automates Mundane Tasks
Thanks to the time-saving characteristics of the cloud, key activities, such as entering data and financial reporting can now all be generated in a relatively shorter period. Automating these mundane and repetitive tasks frees up valuable resources within the finance operations to allow business leaders to focus more on areas of real business value and growth.
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Better Accessibility
The rapid shift to the remote working mode due to the ongoing pandemic has increased the demand for cloud computing solutions. With high-end security and uninterrupted internet connectivity, systems and business data can be made accessible to the finance function no matter where they are, thereby helping in fast decision-making. This makes business operations more agile and ensures more flexible working and cost-effective staff structures.
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Enhanced Speed, Efficiency, and Accuracy
Shifting to the cloud infrastructure enables financial tech companies to speed up day-to-day activities and process a large amount of data. Automating and streamlining core operations can prevent duplication and human errors. This ultimately saves the time, money, and manual labor in getting your financial data up to date and accurate. Moreover, this drives efficiency and improves your bottom line.
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Better Collaboration
When communicating with suppliers or other members of the finance operations, you can easily access, edit, and share business-critical documents securely, no matter where you are. Cloud-based business workflow and file sharing ensure updates in real-time with enhanced visibility. According to the Forbes survey, 64% of respondents indicated that cloud-enabled collaboration tools have helped their companies to process faster than ever before.
How to Plan and Implement Cloud Computing Solutions
Business Case Creation
The cloud helps to redefine and innovate IT strategy. It also acts as an engine to rapidly develop new capabilities and services to meet business essentials. Several digital transformation solutions like customer relationship management, finance, enterprise management resource management are already cloud-based. However, they are just not mainly communicated as such.
A cloud business case should focus on the ways the bank can tap into cloud computing solutions cost-effectively to drive valuable customer insights, offers, experiences; increase revenue; reduce costs; find and onboard best the talent, and offer consistent enterprise operating platforms.
The business case should also encompass a baseline cloud value-assessment model for mapping the economics of ever-changing market forces, cost, and business assumptions and help in planning the scenario.
Lastly, it should resolve change management issues. For example, cloud technology may significantly change certain employee roles, like what steps would be required to help adapt the company’s culture and mindset.
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Solution Design and Implementation
The time, effort, and cost to move workloads to the cloud environment may be a major concern for Financial Tech companies planning to implement cloud strategies. Time to market and cost are two main factors when organizations are looking to leverage business-development technologies such as advanced data analytics and machine learning. Third-party cloud hosting service providers offer these and other capabilities that can reduce the development time contrary to building capabilities in-house.
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Vendor Management
The banking sector will be gradually migrating from both hybrid and multi-cloud environments in the coming years. Meanwhile, vendors are likely to offer new, cloud-based services and capabilities regularly. Financial Tech companies should avoid vendor lock-in to ensure easy adaptation to the marketplace changes without requiring to re-platform when shifting from one vendor to another.
Moreover, with time, vendors may also offer better pricing flexibility by leveraging various cloud platforms. It may help a company to shift workloads from one cloud to another and address unique business needs. Then they could implement best practices built on one cloud platform to departments with the help of other cloud hosting service providers.
Also, using a multi-vendor or multi-cloud strategy can be a bit complex and challenging as well. Creating an in-depth understanding of architectural components and governance strategy ensures the best use of the multi-cloud environment.
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Data Security
Ensuring the security of data has always been the top priority of bank leaders. The traditional infrastructure and capabilities of an enterprise may have limited abilities to detect and meet new risks and security vulnerabilities. Cloud solutions can help you overcome this limitation.
Security is diverse in the cloud due to the tools that are native and specific to each cloud provider’s environment and the fact that cloud hosting service providers typically are accountable for the security of the lower-level layers of the infrastructure. The shared responsibility of data security between the cloud service providers and the clients they host changes how companies should expect and prepare for security risks and vulnerabilities.
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Regulatory Compliance
Cloud computing solutions can empower banks and financial services organizations to address the changing regulatory reporting requirements. Such features have become a must-have in an industry that deals with cross-border transactions.
Cloud-based solutions can also enable organizations to perform intraday liquidity and risk calculations, and mine trade surveillance data to identify and fix anti-money laundering and other fraud problems. A cloud-based platform facilitates data-brokering placement capabilities based on the criticality of data and Certified Safety Professional certifications.
Final Thought
While the finance operations have been shifting to the cloud at a snail’s pace compared to other departments, it’s never too late to start moving to the cloud. CFOs need to rethink the role played by their finance operations and take a step towards digital transformation in 2021.
As a leading provider of fintech development services, we are here to help you at every step of the digital transformation journey of your FinTech firm. Get in touch with us to discuss your business requirements with our team of FinTech industry experts.
FAQs
1. Why should you opt for cloud transformation?
Here are the key benefits of cloud transformation:
- Synchronizes the enterprise
- Helps in the development of resilient operations
- Drives business innovation
- Improves IT security
- Helps you unleash new talents and new workflows
- Helps you scale computing costs as per your need
2. What are the main development stages of FinTech?
There are three main development phases of Fintech – 1. Innovation struggle, 2. partnership and client focus, and 3. Repositioning.
3. What is your FinTech expertise?
As an experienced provider of FinTech development services, we hold expertise in
- Digital Transformation Consulting
- LOS Solutions
- Digital Lending Software
- Digital Payment Solutions
- Lead Management Software
- Loan Management Solutions
- Chatbot Development
- Accounting Software
- Investment Management Solutions
- Business Intelligence Solutions
- Cryptocurrency Wallet Development
- Cryptocurrency Exchange Development
