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<\/div>\nIs it surprising to know that 55 percent of legacy financial institutions (FIs) report lacking maturity in core systems? Or that, on average, 15 percent of an FI’s annual operating costs go toward maintaining core banking systems that are outmoded? It’s true, but not for long.<\/p>\n
“Migrating to cloud- and AI-based solutions could help FIs handle growing calls for faster banking tools during the COVID-19 pandemic, and recent trends show they are beginning to do so,” according to PYMNTS’ June 2020 Digital Banks And The Power Of The Cloud Tracker®<\/a> done in collaboration with NuoDB<\/a>.<\/p>\n “Banks are spending approximately 15 percent of their yearly operating budgets on technology upgrades, according to one study, and there has been an increase in partnerships between third-party cloud technology providers and global FIs eager to enhance their online platforms. Many of these legacy banks are also planning to integrate AI [artificial intelligence] tools, but their reliance on outdated infrastructure could be hindering their cloud migration plans. These FIs will have to overcome such frictions to keep pace with competitors,” the new Tracker<\/a> states.<\/p>\n AI Poised for a “Profound Impact”<\/strong><\/p>\n Bringing pure digital efficiency to bear on legacy systems has considerable upsides for FIs.<\/p>\n “The ability to scale core banking infrastructures to accommodate increased traffic or support upgraded digital banking tools is one of the main benefits cloud-based platforms offer, and cloud-native challenger banks are using this scalability to compete with traditional FIs tied to in-house banking servers,” the Digital Banks And The Power Of The Cloud Tracker®<\/a> states.<\/p>\n That’s increasingly true as the pandemic exposes weaknesses in core banking systems, particularly an inability to parse decisioning data for greater customer-centricity.<\/p>\n “AI is poised to make a profound impact on the banking sector,” Ariff Kassam<\/a>, chief technology officer at NuoDB, told PYMNTS<\/a>. “From global customer acquisition efforts to real-time personalization of the user experience to infrastructure technology management, the opportunities are endless.”<\/p>\n Kassam said NuoDB is employing cloud-based upgrades to reduce total cost of ownership of core banking tech, to increase global reach by using AI to identify and jump on trends even at the regional level, and by enhancing security capabilities for virtual environments.<\/p>\n “While the utilization of AI alongside cloud-based infrastructure may be limited today, the impact of rising data costs coupled with the increasing ease of moving between cloud providers will be a catalyst for adoption,” Kassam said<\/a>.<\/p>\n Cloudy, With A Chance of Innovation<\/strong><\/p>\n Banks, credit unions and other FIs have responded, proactively or reactively, by assembling complex tech stacks with components that may do the job — but often not very well, and certainly not with anything resembling speed. For many FIs, cloud banking<\/a> is the key to unlocking more resilient services while vastly improving customer experience.<\/p>\n “Addressing … frictions is more important than ever for FIs, and this urgency is putting a spotlight on the benefits of migrating services to the cloud. Cloud-based systems have several key advantages over legacy core banking infrastructure that relies on physical servers,” the Digital Banks And The Power Of The Cloud Tracker®<\/a> states.<\/p>\n “[Cloud-based systems] can handle greater volumes of data and allow banks to test innovative new tools before bringing them to market. These technologies also enable FIs to access the information necessary to provide products such as loans to customers experiencing financial hardships during the pandemic, for example.<\/a> Cloud-based tools can also expedite approvals for daily payments and transactions, allowing businesses and consumers to send and receive funds as necessary.”<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n Tags:<\/b> Pymnts<\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"See Campaign: <\/strong>https:\/\/www.pymnts.com\/tracker\/digital-banks-and-the-power-of-the-cloud-june-2020\/<\/a>
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Is it surprising to know that 55 percent of legacy financial institutions (FIs) report lacking maturity in core systems? Or that, on average, 15 percent of an FI’s annual operating costs go toward maintaining core banking systems that are outmoded? It’s true, but not for long. “Migrating to cloud- and AI-based solutions could help FIs … Continue reading Cloud Banking Gives Legacy Systems A Lift<\/span><\/a> Continue Reading