Opinion

Cloud is the booster shot fintech needs

Jaya Vaidhyanathan | Updated on October 27, 2021

Jaya Vaidhyanathan, CEO of BCT Digital

From being just another techy buzzword, cloud computing has now become a global force to reckon with.

Late last month in September 2021, Paytm became India's first platform to accept international remittances directly into a digital wallet. Paytm Payments Bank forged a tie-up with Ria Money Transfer, a cross-border money transfer firm and a subsidiary of Euronet Worldwide Inc. with 490,000 retail outlets worldwide. Every money transfer is made in real-time, with all security features intact. The mobile wallet industry processes around $2 billion a day, with experts estimating that $1 trillion will be transacted annually by 2023.

Sounds easy, and it is so too, thanks to cloud computing that is increasingly proliferating the fintech industry today. Just 15 years ago, when Amazon released its first cloud-based platform, no one could have imagined the impact cloud technology would have on global businesses. From being just another techy buzzword, it has now become a global force to reckon with. For the financial industry, in particular, the cloud is creating an epochal disruption, the impact of which is yet to be seen.

The 2020s – The decade of cloud

To be sure, the decade of the 2020s will be dominated by the adoption of the cloud. Not only are more organisations moving their infrastructure to the cloud, but over 55% say they are using multiple public clouds, according to the 2020 IDG Cloud Computing Study. A sizable slice of companies’ IT budget (32 per cent) is dedicated to this purpose. Not one to miss out, the fintech industry is capitalising on the benefits of the cloud like never before.

To start with, self-service applications based on cloud technology are helping both individuals and businesses with the ability to open and manage their finances from a distance. Fintech is embracing this cloud technology with open arms. Despite early concerns about security and data protection, the cloud has proved reasonably secure if the right measures are taken. Zero-trust verification and encrypted data have increased cloud security in recent years. The fintech industry couldn’t have asked for more.

Cloud computing in fintech is an accelerating trend that meets many of the financial sector’s current requirements. In fact, the cloud has been credited with helping grow the fintech sector’s forecasted compound annual growth rate of 23.84 per cent, according to a Valuates report. As fintech start-ups and established financial organisations race to provide customers and end-users with more speed, reliability, and 24/7 uptime in their digital products and services, cloud computing is cost-effectively enabling all of this while providing additional security in an age where regulatory compliance is becoming increasingly stringent.

Fintech’s future writ large on Cloud

Today cloud computing is assisting in automating the audits and quality process, thereby, allowing fintech engineers to work on product enhancement. Cloud set-ups offer solutions at a global level, providing access to data 24 by 7, 365 days a year. Cloud computing allows seamless performance by giving access to high-performance servers and data storage. Cloud helps in making the production cycle continuous, thereby, reducing the time-to-market of a product or solution. Most cloud-based solutions are now one-click solutions that could also be accessed via a smartphone.

For fintech, acquiring and working with data is a top priority, from onboarding and identity verification processes to account management, balance, checking, analysing spending habits, etc. Data is always the key. Companies can use cloud technology to gather and store large quantities of data securely and make it accessible at any time.

Cloud provides agility to fintechs

Fintechs are rapidly growing platforms. This means they need infrastructure that can grow with them and not put up unnecessary barriers or create challenges where there needn’t be any. Cloud technology provides the agility to scale relatively easily, while saving on on-premises technology infrastructure, which can be more costly to upgrade. Moving infrastructure to the cloud measures accessibility, flexibility, and scalability for both fintech and financial giants.

Indeed, the financial services sector has revolutionised the way each of us conducts business and deals with payments. Cloud computing along with a few other tools is leading to predictive modelling, to prepare for ‘what if’ scenarios, automation of front-end sales and customer-facing environments. It is an important enabler for fintech companies. Cloud allows organisations of all types and sizes across the financial sector to build scalability and flexibility into their business models.

At its core, the cloud is an agile technology, and without this agility some of the latest advancements we’re seeing in the financial industry overall would not be possible. The cloud helps financial companies get their products to market faster, adapt to meet new trends or market demands, and even adjust strategy to significant world events, such as the Covid-19 pandemic. Its agility is there to be harnessed, and this is perhaps one of the greatest benefits that fintech companies can take advantage of in the coming years.

The author is the CEO of BCT Digital

Published on October 27, 2021

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