The Advantages of Cloud Computing and AI in Banking

According to Gartner, the demand for artificial intelligence (AI) in cloud services will only grow stronger. Companies are developing many products but some of them will never get out of the prototype or proof-of-concept phase. Through data analysis and enabling low skill set users (or those with limited budgets), cloud providers bring their services to all kinds of companies, large and small. The next step will belong to AI. With it, firms will power critical processes and keep tabs on infrastructure, power usage, cooling systems, network management, and more. How does banking benefit from this market development?

Both artificial intelligence and the cloud introduce automation, which means financial and operational efficiency.

Head in the Cloud and Ghost in the Machine

For many companies, cloud computing has been a catalyst for digital transformation. It helps to structure and power business operations, product performance and data availability. For traditional banking, as well as FinTech products, these benefits are clearly worth searching for the right solution. Especially, when it comes to mobile applications.

Financial app development is not easy. AI, as well as the cloud, helps immensely. But how exactly? Artificial intelligence and machine learning, in particular, help customers manage their accounts. They get tailored offers (like loans or insurance deals), as well as the opportunity to manage assets and invest savings. The more customers the product has the bigger chance for accurate recommendations and satisfactory levels. That requires a serious thought-out process of creating an app.

Traditional as well as challenger banks offer functionalities like managing account transactions, paying bills, and making money transfers. All of these can be automated. With the use of AI, customers who earn less can get recommended saving plans. People with higher incomes have a variety of business options – from optimized savings to investing in cryptocurrencies.

Banks use different tools and techniques to offer more services and provide better customer support. From data mining, where AI is tremendously helpful, to natural language processing, which enables vocal interactions. More options for users, more options for compliance departments (fraud detection methods), and unconventional usage that we are not yet aware of. All is possible through the use of artificial intelligence.

And what about the cloud? There are many benefits as well. Through the power of the cloud, computing organizations can get increased customer insights that can serve as a basis for an uncanny level of personalization. There’s also a matter of reduced data and continuity risk.

In fact, the last issue was once the greatest weakness of the cloud. Now, it’s one of the biggest benefits. Instant identification of potential security breach, as well as a high level of redundancy and back-up for disaster recovery, arms banking industry with fantastic weapons. They can fight some of the most threatening situations out there and leverage tools for even better customer service.

Who is adopting cloud and AI in banking?

Interesting adoptions

According to PWC, and prior to the COVID-19 situation, just 29% of financial services firms had 60% or more of their workforce operating from home at least once per week. During COVID, the number spiked to 69%. Major banks and other financial institutions jumped the trend really quickly. Solutions like Amazon WorkSpaces, a cloud-based Desktop-as-a-Service (DaaS) tool, helped teams cooperate to continuously deliver value to customers.

A recent report from Congressional Research Service shows that a pre-COVID study revealed an interesting detail. Nearly 91% of banks and other financial institutions adopted and used the cloud or at least thought about it in the near future. COVID-19 accelerated the adoption, as well as overall digital transformation efforts. Banks are no longer held back by largely outdated business models and operational strategies. Clouds and AI, as a result, bring value.

There are examples of cloud adoptions like Adelaide Bank and Bendigo when operational costs dropped even 50% after migration. That proves the point of being able to scale the organization towards a more digital future. Not for the sake of making a change, but for the need to make a real difference.

The same goes for artificial intelligence. Companies like Enova, for example, use artificial intelligence and machine learning to provide advanced analytics. This helps banks facilitate responsible lending. Another example? Scienaptic AI. This firm offers a platform that secures financial companies and credit institutions more transparency while cutting losses. The solution connects both structured and unstructured data, transforms it and learns from mutual interactions between both types. As a result, companies get contextual and underwriting business intelligence.

Conclusions

We could go on and on, but the point is to hop on board the hype train. Unlike some bubbles in the past, cloud and AI, as well as machine learning and business operations automation, are buzzwords that offer real value. If you’re not sure how to deal with it and where to start, follow the breadcrumbs industry. There are lots of solutions you want to consider when it comes to transformation.

About the Author

Jarosław Ściślak, Content Writer at Code & Pepper

Branding, marketing, business scaling, content & company culture specialist. Created shared value (CSV) evangelist. Part of Code & Pepper marketing team. More on: scislak.com

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