Why the cloud is crucial to agile, future-proof banks

TymeBank’s Dietmar Bohmer highlights the benefits of banks moving to the cloud to stay agile.

Banks are under more pressure than ever to deliver great digital offerings. On the one hand, customers used to high-quality digital experiences in other parts of their lives increasingly expect the same from their banks. On the other, a host of upstart fintech companies are after their lunch.

It’s therefore pivotal that banks are as agile as possible. They need to be able to meet customer demands as they come up and stay ahead of a dynamic competitive environment. The cloud, and more specifically the ability it gives banks to have a complete overview of the data they control, is crucial to being able to do so.

Among the benefits offered by the cloud are a 360-degree view of the customer, real-time data insights, robust governance, and collaborative data sharing. Small wonder then that IDC estimates banks will spend more than US$44.6 billion on cloud in 2021.

Customer data benefits
While customer data benefits are certainly not the only benefits of cloud-based banking, they are important.

When it comes to a 360-degree view of the customer, the cloud offers companies the opportunity to house all their various types of data in one secure place, enabling them to better understand customers and personalise services for them. This enables organisations to ensure that customers have the best possible experience at every touchpoint. Tapping into the data cloud will also give banks the best possible chance of effortlessly incorporating machine-learning models to drive an even more personalised and frictionless banking experience.

Adopting the data cloud offers banks the direct and secure sharing of data without the complexity, cost, and risk associated with legacy data platforms. That, in turn, means banks can quickly and easily add new data products, and gain near real-time insights across the business ecosystem on how it’s operating. This can also reduce the manual effort and copying that is necessary with traditional data-sharing tools and can open up new revenue streams.

Finally, a cloud-first approach can greatly improve the way customers interact with the data their banks hold on them. If, for instance, a customer is using a third-party fintech app to track their finances, they’re going to be much more favourably predisposed to their bank if it allows them to import banking data into that app. We live in a quantified age and people expect to be able to track their financial data across a range of services. If a bank fails to give a customer the ability to do so, they will move on elsewhere.

High-speed growth
Of course, there are other manifest benefits to taking a data cloud-based approach. As one of the fastest-growing digital banks in the world, with more than 3.3 million customers gained in 27 months, we’ve seen this for ourselves at TymeBank. With the right cloud partner (in our case, Snowflake), a bank can ensure rapid speed to market and the ability to seamlessly scale – something that’s crucial to rapid growth in a high data-generating environment.

Then, continuous data protection is important as an added layer of protection against human error, enabling a time travel capability or a failsafe option to restore previous versions. Being a disruptor in a well-established industry within a mature market means that experimentation is part of our DNA, and these unique features eliminate traditional data warehousing challenges (costly backups, time-consuming rollbacks) and enable teams to experiment with their data with confidence, knowing that it will never accidentally get lost.

Critically, the data cloud also simplifies compliance. Banking is a highly regulated industry, which requires high levels of data security and robust data management protocols. The data cloud ensures that this kind of compliance is automatically baked into the bank’s everyday operations. Through the data cloud, data silos are eliminated, which can be another huge compliance headache for organisations. No longer is data stored in multiple locations (on-premises or in different clouds) – instead the data cloud offers a single source of truth in which to house the data. This improves accessibility, compliance and data management, as well as single view of customer, as all data is in a robust and highly regulated environment, giving instant access to data for organisations.

Over and above being a bank, the additional levels of compliance have become particularly pertinent in South Africa with numerous applicable legislations, such as POPIA coming into effect. A good data cloud provider should therefore allow for seamless masking of data, role-based access control, full end-to-end logging and audit trails of everything done with the data on the platform. Additionally, a data cloud should allow for secure and effortless data sharing, with functions such as external audit and partners. Given Snowflake’s unique features, the data does not have to leave our environment and we have full logs of what was done with our data.

It’s important to note, however, that these benefits can only really accrue when the relevant solution is native to the cloud and not a legacy solution that is being converted to also work on cloud.

The data cloud and the future of banking
Ultimately, it’s clear that tapping into the data cloud offers compelling benefits for banks. Those which adopt, and make full use of it, will be in the best position to thrive in a competitive and increasingly complex market. Importantly, they will be able to do so in a way that provides them with a future-proofed technology stack that delivers business agility, competitive customer services, governance, single view of customer and enhanced data-sharing capabilities.