The banking industry has gone through a massive digital transformation and the recent global pandemic has set the stage for the transformation to accelerate, much faster than ever before. The bank of the future is here and, if we are to stay in business, cloud adoption is clearly not just a ‘nice to have’.
Today, the cloud is being used daily by almost all of us, from accessing our email accounts to backing up our phone data and apps. According to Gartner, the worldwide public cloud market is forecast to grow 17% this year, and by 2022 up to 60% of organisations globally will be using a cloud-managed service offering.
The surge in demand for cloud services over the last couple of years can be largely attributed to the rise of the digital economy fuelled by a new generation of digitally connected consumers, a trend recently accelerated by the COVID-19 pandemic.
While we, along with several other players in the banking industry, have made progress in our cloud transformation journey, here are four global trends that will accelerate the need for cloud adoption by banks:
I am convinced that cloud technology will be crucial to delivering our network, serving our customers, improving efficiencies and embracing new business opportunities
1. Demand for seamless banking anytime, anywhere
Even before COVID-19, the demand for online and digital banking services were growing steadily. With the cloud, the barriers of delivering banking services will drop dramatically, making banking more accessible to a broader community of unbanked or underbanked. Consumers will have 24/7 access to banking services, with zero downtime for maintenance. And banks like us get the ability to quickly develop, test and roll out new products or user features without any disruptions to the customer experience.
2. Society’s need for resilient and secure banks
The pandemic has shone a spotlight on the need for businesses and banks to be resilient from a risk mitigation, cost and security perspective. With ever-increasing demand for computer processing power, the traditional way in which banks have owned and managed physical data centres is no longer cost-effective or sustainable. By accessing the cloud from anywhere, as and when required, we are less dependent on the location of data centres and can utilise processing power more flexibly and efficiently. We also minimise obsolescence, making us leaner and more resilient over the long term.
3. Disrupt or be disrupted
As technology continues to blur the boundaries between different industries by creating new business models and new platforms for aggregating goods and services, the need for innovation and partnerships has never been greater. Traditionally, banks had to set aside a significant amount of time and money for the administration of IT infrastructure, but with the cloud, these resources can now be reallocated towards innovation and improving the user experience.
MOX, our digital bank in Hong Kong, has all of its systems born in cloud only. Another example is, our new award-winning Global Payments system, scPay which is fully cloud native and handles high-value as well as micropayments for the e-commerce world. By having our applications on cloud, we are also able to develop new business models and offer a broader portfolio of services by integrating with Fintech partners, our clients and marketplaces, like e-commerce platforms, ride hailing ecosystems or super apps. New apps can be piloted in one market and scaled up rapidly across others which is especially important for a bank with a footprint as diverse as ours.
4. The future of work is the cloud
We know that work is facing significant change. In a recent survey conducted by Standard Chartered, 77 per cent of people around the world want to work more flexibly and 70 per cent of them want to continue working from home at least two days a week once restrictions are lifted. Since the start of the pandemic, Standard Chartered has gone from having most people working in offices, to 75 per cent of us working from home. Meeting the massive and rapid scale-up in demand for connectivity via collaboration tools for video conferencing, audio conferencing, document sharing, would not have been possible without the cloud. But as flexible work arrangements become the norm, employees’ ability to collaborate, use office tools and access documents from anywhere, anytime, will be a necessity which the cloud can enable.
Our recent partnership with Microsoft Azure marks a major milestone for Standard Chartered in adopting a cloud-first approach and making our digital ambitions a reality: from digital banking, to next generation payments, to banking as a service, to partnerships and greater connectivity.
While our journey to be fully on the cloud will be a multi-year journey, I am convinced that cloud technology will be crucial to delivering our network, serving our customers, improving efficiencies and embracing new business opportunities.