{"id":54653,"date":"2021-02-02T09:02:20","date_gmt":"2021-02-02T17:02:20","guid":{"rendered":"https:\/\/cm-edgetun.pages.dev\/en-us\/industry\/microsoft-in-business\/?p=54653"},"modified":"2022-04-12T09:38:11","modified_gmt":"2022-04-12T16:38:11","slug":"why-the-future-of-banking-is-in-the-cloud","status":"publish","type":"post","link":"https:\/\/cm-edgetun.pages.dev\/en-us\/industry\/microsoft-in-business\/business-transformation\/2021\/02\/02\/why-the-future-of-banking-is-in-the-cloud\/","title":{"rendered":"Why the future of banking is in the cloud"},"content":{"rendered":"<p><img decoding=\"async\" class=\"col-xs-12 col-sm-6\" style=\"float: right;padding-left: 0px!important;padding-right: 0px!important;margin-bottom: 15px;margin-left: 15px\" src=\"https:\/\/cm-edgetun.pages.dev\/en-us\/industry\/blog\/wp-content\/uploads\/sites\/28\/2021\/01\/FinastraBlog_FINAL_FeatureImage_1280x720_1.13.jpg\" alt=\"picture of city skyline\" width=\"100%\">When it comes to digital transformations, financial institutions are reaching toward the cloud. Part 10 of&nbsp;Celent\u2019s&nbsp;Digital Panel survey reveals that&nbsp;75&nbsp;percent of respondents rate a skyward transition as their top technology priority.<sup>1<\/sup><\/p>\n<p><span data-contrast=\"auto\">Interest in cloud adoption is part of an overall movement to improve the customer experience as consumers turn to online and mobile channels to manage their finances. The COVID-19 pandemic has only served to accelerate the transition to digital.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">&nbsp;<\/span><\/p>\n<p><span data-contrast=\"auto\">McKinsey<\/span><span data-contrast=\"auto\">&nbsp;&amp; Company<\/span><span data-contrast=\"auto\">&nbsp;estimates that&nbsp;<\/span><span data-contrast=\"auto\">the&nbsp;<\/span><span data-contrast=\"auto\">adoption of digital channels and capabilities was advanced&nbsp;<\/span><span data-contrast=\"auto\">five<\/span><span data-contrast=\"auto\">&nbsp;years over the initial&nbsp;<\/span><span data-contrast=\"auto\">eight<\/span><span data-contrast=\"auto\">&nbsp;weeks of the pandemic.<\/span><span data-contrast=\"auto\"><sup>2<\/sup> &nbsp;Other research indicates that newly adopted digital habits are here to stay.&nbsp;<\/span><span data-contrast=\"auto\">Most<\/span><span data-contrast=\"auto\">&nbsp;<\/span><span data-contrast=\"auto\">consumers<\/span><span data-contrast=\"auto\">\u201487&nbsp;<\/span><span data-contrast=\"auto\">percent<\/span><span data-contrast=\"auto\">\u2014<\/span><span data-contrast=\"auto\">say they will continue to use new digital tools and channels in the future, according<\/span><span data-contrast=\"auto\">&nbsp;to<\/span><span data-contrast=\"auto\"> BAI Research.<sup>3<\/sup> <\/span><\/p>\n<p><span data-contrast=\"auto\">However, satisfaction with several aspects of the digital banking experience&nbsp;<\/span><span data-contrast=\"auto\">i<\/span><span data-contrast=\"auto\">sn\u2019t measur<\/span><span data-contrast=\"auto\">ing<\/span><span data-contrast=\"auto\">&nbsp;up to consumer expectations. The result, according to Bain<\/span><span data-contrast=\"auto\">&nbsp;&amp; Company<\/span><span data-contrast=\"auto\">\u2019s 2019 customer experience study, has been a hidden customer defection.<sup>4<\/sup> <\/span><\/p>\n<p><span data-contrast=\"auto\">The survey of over 131,000 people indicates that loyalty is low<\/span><span data-contrast=\"auto\">,<\/span><span data-contrast=\"auto\">&nbsp;and traditional banks and credit unions are losing consumer business for secondary financial products, such as a mortgage. Increasingly, traditional account holders have been turning to more digital-savvy providers when seeking new products like these<\/span><span data-contrast=\"auto\">.<\/span><span data-contrast=\"auto\">&nbsp;As a result, the Global Digital Lending Platform Market size is expected to reach $11.6 billion by 2025, rising at a market growth of 20.3% CAGR during the forecasted period<\/span><span data-contrast=\"auto\">.<\/span><span data-contrast=\"auto\">&nbsp;<\/span><span data-contrast=\"auto\">Moving into 2021, digital will become increasingly more integrated into the lives of consumers, calling on financial institutions to quickly evolve to a higher level of digital operating. That means providing more capabilities to keep customers and members loyal to the brand.&nbsp;<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">&nbsp;<\/span><\/p>\n<p><span data-contrast=\"auto\">The answer to this rapid evolution to digital services lies in the cloud.&nbsp;<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">&nbsp;<\/span><\/p>\n<h2><span data-contrast=\"auto\">Go&nbsp;<\/span><span data-contrast=\"auto\">b<\/span><span data-contrast=\"auto\">ig or&nbsp;<\/span><span data-contrast=\"auto\">g<\/span><span data-contrast=\"auto\">o&nbsp;<\/span><span data-contrast=\"auto\">h<\/span><span data-contrast=\"auto\">ome on&nbsp;<\/span><span data-contrast=\"auto\">c<\/span><span data-contrast=\"auto\">loud&nbsp;<\/span><span data-contrast=\"auto\">i<\/span><span data-contrast=\"auto\">nitiatives<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">&nbsp;<\/span><\/h2>\n<p><span data-contrast=\"auto\">Two-thirds of the panel responding to&nbsp;<\/span><span data-contrast=\"auto\">Celent\u2019s<\/span><span data-contrast=\"auto\">&nbsp;survey indicate that they have an enterprise-wide cloud migration strategy at the ready.<\/span><span data-contrast=\"auto\"><sup>5 <\/sup>However, near<\/span><span data-contrast=\"auto\">&#8211;<\/span><span data-contrast=\"auto\">term initiatives focus primarily on migrating non-core systems to the cloud while maintaining core banking systems and data on<\/span><span data-contrast=\"auto\">&#8211;<\/span><span data-contrast=\"auto\">premise<\/span><span data-contrast=\"auto\">s<\/span><span data-contrast=\"auto\">.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">&nbsp;<\/span><\/p>\n<p><span data-contrast=\"auto\">W<\/span><span data-contrast=\"auto\">ithout a long-term plan for addressing the customer experience<\/span><span data-contrast=\"auto\">,<\/span><span data-contrast=\"auto\">&nbsp;<\/span><span data-contrast=\"auto\">these approaches<\/span><span data-contrast=\"auto\">&nbsp;could backfire<\/span><span data-contrast=\"auto\">.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">&nbsp;<\/span><\/p>\n<p><span data-contrast=\"auto\">For one thing, most banking cores were developed well before the modern age of the computer<\/span><span data-contrast=\"auto\">\u2014<\/span><span data-contrast=\"auto\">and<\/span><span data-contrast=\"auto\">&nbsp;the&nbsp;<\/span><span data-contrast=\"auto\">smartphone-enabled applications customers are using to manage their lives. In just the last decade, the number of financial apps has exploded. From making deposits to paying bills, consumers are turning to online and mobile channels to manage their money.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">&nbsp;<\/span><\/p>\n<p><span data-contrast=\"auto\">While it is possible to connect digital applications like these with traditional cores, the financial institution isn\u2019t always realizing the most efficient outcomes. Without care, banks and credit unions can create silos that result in internal inefficiencies and<\/span><span data-contrast=\"auto\">,<\/span><span data-contrast=\"auto\">&nbsp;more importantly, a poor customer experience.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">&nbsp;<\/span><\/p>\n<p><span data-contrast=\"auto\">Poor experiences across digital channels encourage defection down the line when customers or members seek to open new account<\/span><span data-contrast=\"auto\">s<\/span><span data-contrast=\"auto\">, secure financing<\/span><span data-contrast=\"auto\">,<\/span><span data-contrast=\"auto\">&nbsp;or adopt<\/span><span data-contrast=\"auto\">&nbsp;<\/span><span data-contrast=\"auto\">new digital banking service<\/span><span data-contrast=\"auto\">s<\/span><span data-contrast=\"auto\">.&nbsp;&nbsp;<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">&nbsp;<\/span><\/p>\n<p><span data-contrast=\"auto\">Migrating to a cloud-based core solves these disconnects by creating a unified environment. Data and applications are connected by APIs, making it simple for banks and credit unions to seamlessly unite a world of products and services.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">&nbsp;<\/span><\/p>\n<p><span data-contrast=\"auto\">Fortunately, cloud-based core migrations are far simpler than previous core transformations.&nbsp;<\/span><span data-contrast=\"auto\">S<\/span><span data-contrast=\"auto\">implicity and ease are demonstrated by Finastra, the first core provider to transition to the cloud. Finastra has already migrated nearly a million users to cloud-based cores due to the streamlined efficiency of the process and the superior results financial institutions have received.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">&nbsp;<\/span><\/p>\n<h2><span data-contrast=\"auto\">Meeting the&nbsp;<\/span><span data-contrast=\"auto\">i<\/span><span data-contrast=\"auto\">nnovation&nbsp;<\/span><span data-contrast=\"auto\">i<\/span><span data-contrast=\"auto\">mperative&nbsp;<\/span><span data-contrast=\"auto\">with<\/span><span data-contrast=\"auto\">&nbsp;the&nbsp;<\/span><span data-contrast=\"auto\">c<\/span><span data-contrast=\"auto\">loud<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">&nbsp;<\/span><\/h2>\n<p><span data-contrast=\"auto\">As consumers accelerate&nbsp;<\/span><span data-contrast=\"auto\">the&nbsp;<\/span><span data-contrast=\"auto\">adoption of digital banking services, innovation has become a top priority for financial institutions.&nbsp;<\/span><span data-contrast=\"auto\">But<\/span><span data-contrast=\"auto\">&nbsp;r<\/span><span data-contrast=\"auto\">ather than replacing the current focus on cloud adoption, the two initiatives will work&nbsp;<\/span><span data-contrast=\"auto\">together<\/span><span data-contrast=\"auto\">.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">&nbsp;<\/span><\/p>\n<p><span data-contrast=\"auto\">Research by&nbsp;<\/span><span data-contrast=\"auto\">Celent<\/span><span data-contrast=\"auto\">&nbsp;indicates that&nbsp;<\/span><span data-contrast=\"auto\">52<\/span><span data-contrast=\"auto\">&nbsp;percent of surveyed banking executives had&nbsp;<\/span><span data-contrast=\"auto\">platformification<\/span><span data-contrast=\"auto\">&nbsp;initiatives underway or are considering it as a path toward innovation.<\/span><span data-contrast=\"auto\"><sup>6 <\/sup>Defined as a plug<\/span><span data-contrast=\"auto\">&#8211;<\/span><span data-contrast=\"auto\">and<\/span><span data-contrast=\"auto\">&#8211;<\/span><span data-contrast=\"auto\">play business model that allows multiple players to connect and exchange value,&nbsp;<\/span><span data-contrast=\"auto\">platformification<\/span><span data-contrast=\"auto\">&nbsp;is born in the cloud, where multiple vendors connect to APIs and build a nearly limitless selection of products and services.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">&nbsp;<\/span><\/p>\n<p><span data-contrast=\"auto\">For financial institutions, it\u2019s the plug-and-play aspect of cloud functionality that matters most when it comes to adapting to the increasingly digital environment. Through cloud-based APIs, banks and credit unions easily connect to the products and services their customers want to use or rapidly digitize whole processes to improve the customer experience.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">&nbsp;<\/span><\/p>\n<p><span data-contrast=\"auto\">The result<\/span><span data-contrast=\"auto\">?<\/span><span data-contrast=\"auto\">&nbsp;<\/span><span data-contrast=\"auto\">A<\/span><span data-contrast=\"auto\">n interconnected banking web where customers&nbsp;<\/span><span data-contrast=\"auto\">seamlessly<\/span><span data-contrast=\"auto\">&nbsp;<\/span><span data-contrast=\"auto\">switch between services and banks realize the benefit of faster<\/span><span data-contrast=\"auto\">,<\/span><span data-contrast=\"auto\">&nbsp;more efficient processes.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">&nbsp;<\/span><\/p>\n<p><a href=\"https:\/\/info.microsoft.com\/ww-landing-Financial-Institutions-Guide-to-the-Public-Cloud-eBook.html?lcid=en-us&amp;wt.mc_id=AID3028656_QSG_BLOG_505660\"><span data-contrast=\"auto\">Learn more about how the cloud can transform your financial institution.<\/span><\/a><\/p>\n<hr>\n<p><sup>1<\/sup> Bob Meara and Craig Focardi. \u201cCloudy Skies in the Forecast: Accelerating Cloud Migration in a Pandemic.\u201d <em>Celent. <\/em>Celent Digital Panel Series Part 10, Sep. 30, 2020. Web.<br \/>\n<sup>2<\/sup> Aamer Baig, et al. \u201cThe COVID-19 Recovery Will Be Digital: A Plan for the First 90 Days.\u201d McKinsey &amp; Company, May 14, 2020. Web.<br \/>\n<sup>3<\/sup> \u201cBAI Research: 87% of Consumers Plan to Continue Their Increased Use of Digital Banking Tools After the End of the COVID-19 Pandemic.\u201d <em>Businesswire. <\/em>BAI Research Press Release, Sep. 9, 2020. Web.<br \/>\n<sup>4<\/sup> \u201cAs Retail Banks Leak Value, Here\u2019s How They Can Stop It.\u201d <em>Bain &amp; Company. <\/em>Bain &amp; Company Report, Nov. 18, 2019. Web.<br \/>\n<sup>5<\/sup> Bob Meara and Craig Focardi. \u201cCloudy Skies in the Forecast: Accelerating Cloud Migration in a Pandemic.\u201d <em>Celent. <\/em>Celent Digital Panel Series Part 10, Sep. 30, 2020. Web<br \/>\n<sup>6<\/sup> Gareth Lodge. \u201cPlatformifiation: How Banks Can Transform Their Innovation Efforts.\u201d Celent, May 2, 2018. Web.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>When it comes to digital transformations, financial institutions are reaching toward the cloud. Part 10 of&nbsp;Celent\u2019s&nbsp;Digital Panel survey reveals that&nbsp;75&nbsp;percent of respondents rate a skyward transition as their top technology priority.<\/p>\n","protected":false},"author":438,"featured_media":54671,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false,"_classifai_error":"","_classifai_text_to_speech_error":"","footnotes":""},"categories":[1536],"post_tag":[62,63],"content-type":[534],"coauthors":[1355,1364],"class_list":["post-54653","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-transformation","tag-cloud-intelligence","tag-cloud-solutions","content-type-industry-trends"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Why the future of banking is in the cloud - Microsoft in Business Blogs<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cm-edgetun.pages.dev\/en-us\/industry\/microsoft-in-business\/business-transformation\/2021\/02\/02\/why-the-future-of-banking-is-in-the-cloud\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why the future of banking is in the cloud - Microsoft in Business Blogs\" \/>\n<meta property=\"og:description\" content=\"When it comes to digital transformations, financial institutions are reaching toward the cloud. 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