January 15, 2020 | Written by: Rodrigo Kede Lima
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Fintech leader Broadridge Financial announced this week that it is moving a significant portion of its digital infrastructure to a private cloud managed by IBM. For this $4 billion-dollar global Fintech organization, it highlights a larger industry-wide trend where the growing reliance on a cloud-first strategy — one where the cloud is primary, prioritized and promoted — is the new normal and those who don’t achieve this will fall behind the competition.
Gartner reported that by 2022, a cloud shift across key enterprise IT markets will increase to 28%, up from 19% in 2018. For financial institutions, a hybrid cloud approach that offers a mix of public cloud flexibility and private cloud security are a necessary tool for this highly regulated and sensitive market. With a hybrid architecture the financial industry has the freedom to extend beyond their data centers and into cloud services.
By powering digital transformation with the cloud, banks are also preparing for a dynamic, mobile-first future. This week, Broadridge joins a growing list of global financial service providers, including Bank of America, BNP Paribas, Santander and Royal Bank of Canada, that are choosing the hybrid cloud model to continue the evolution of the industry.
Hybrid Cloud Takes Digital Banking to the Future
Banks can’t necessarily predict what new services customers will demand, or, more importantly, when they’ll demand them. For example, if a critical mass of banking customers is logging onto the site at the same time it could over exhaust the servers, slowing down customer interactions and ultimately hurting the overall brand experience.
This is part of the promise of hybrid cloud. It lets institutions scale up and down as needed, providing both instant and long-term flexibility that enables institutions to adapt and move with constantly changing conditions.
It doesn’t just stop there, in fact there are several significant benefits to a sophisticated hybrid cloud strategy. Here are some of the way’s hybrid cloud is already helping financial institutions:
It’s reducing costs – Hybrid cloud helps banks scale their data needs in real-time, which avoids the expensive proposition of maintaining a lot of unused digital capacity.
It’s making banks more efficient – Hybrid cloud enables banks to move digital resources where they are needed quickly, enabling them to respond to shifting customer demands.
It’s sparking innovation – Hybrid cloud speeds up innovation because it’s not limited to a specific geographical location or even organization.
It’s safer – Hybrid cloud can keep data more secure. Security threats change constantly, and hybrid cloud gives banks access to tools like AI that will be critical to identifying and addressing cyberthreats.
And banks are seeing results.
Westpac, Australia’s oldest bank, migrated banking services and took on a new cloud approach in order to improve its customer service. As a result, it reduced the time it takes to set-up new applications from 19 days to just 3-5, and saw a more than 30 percent reduction in set-up costs.
When Royal Bank of Canada adopted a more sophisticated cloud solution the organization become more agile, and shortened time-to-market for new products and services, while making it easier to adopt new emerging technologies.
Recently, Bank of America launched a hybrid cloud specifically for the financial industry, with cloud services tailored to the legal, regulatory and compliance needs of the industry.
It’s not just customer expectations that are driving banks’ digital transformation. New regulatory and compliance frameworks – like GDPR and varying regional consumer privacy acts – are also compelling banks to adopt hybrid cloud.
Changes such as these in the financial landscape are one of the many reasons trusted organizations are turning to IBM hybrid cloud. Notably because Big Blue has a proven track record supporting many global financial institutions around the world as they look to improve their speed to market, flexibility, resiliency and security.
More digital disruption is on the way for financial services, whether companies are ready for it or not. The Broadridge announcement is further validation that the hybrid cloud model is the way forward for banks.