Banking on the cloud: financial institutions reach the stratosphere of efficiency
At the inaugural Financial Technology (FinTech) Ideas Festival in January this year, executives from leading financial services and technology companies came together to discuss the future of banking. New banking technology is emerging quickly, and global investment in financial technology is on track to grow from around $3 billion in 2013 to $8 billion by 2018.[1] Some of the most notable technologies discussed included APIs, artificial intelligence, blockchain, biometrics and cloud. The high costs of on-premises infrastructure and the need for increased agility will drive at least 65% of banks to the cloud by the end of 2017.[1] With a lower total cost of ownership, flexibility, and speed, the cloud is enabling banks to optimize resources, innovate faster, and improve compliance.
Optimize resources
By reducing the cost of on-premises IT infrastructure and associated personnel, the cloud enables banks to invest more in their business. Moving the world’s 1.2 billion deposit accounts into the cloud could save the banking industry $109 billion a year.[2] One of the benefits of the cost-effective cloud is that it helps banks expand to emerging markets. For example, banks in developing countries are using the cloud to conduct transactions in remote areas where most people previously didn’t have access to banking.[3] At the end of the day, minimizing IT costs frees up resources that can be shifted to driving business transformation.
Innovate and adapt faster
The low cost and flexibility of the cloud also helps banks be more innovative and adaptable to changing markets. By skipping investment in IT capital, banks can develop, launch, and update products and services in hours or days instead of months.[4] This agility made it possible for Metro Bank to become the first new High Street bank to open in the UK in more than a century.[5] The increased processing power of the cloud also accelerates data analysis, and its adaptability makes it easier to update infrastructure or integrate with other solutions in the future. As banks prepare for a future of electronic transactions, cloud has the speed and scalability to handle much higher transaction volume and variability. So when transactions spike before a major holiday for example, cloud-driven banks can meet demand without having to pay for that level of consumption all year. The speed of the cloud also helps banks comply with ever-changing national and international security standards.
Improve compliance
Cloud simplifies compliance in a number of ways. First, the cloud’s ability to handle increased transaction volumes and complex workloads helps banks keep up with stringent compliance standards. Second, the cloud allows banks to mitigate risk by offloading data protection, fault tolerance, and disaster recovery to cloud providers with data management and IT expertise.[6] With global spending on compliance set to reach more than $8 billion in 2017, it’s increasingly important to leverage the power and cost-effectiveness of cloud solutions.[7]
One important aspect of compliance is preventing funds from reaching sanctioned politically exposed persons (PEPs), countries, organizations, and others involved in criminal or terror activities. The cloud makes it simpler and easier for banks to screen against numerous national and international watch lists that are constantly changing. By choosing a cloud-based sanction screening solution, banks can effectively prevent criminal transactions without disrupting business for legitimate customers or draining their resources.
Screening transactions in the cloud
One solution that takes advantage of the low cost, speed, and security that cloud can offer is Screen; a flexible cloud-based screening solution from Temenos. The cloud enables the solution to run many complex screening algorithms in real time, including direct matching, character-based literal screening, relaxed pattern matching, lexical screening, and more. It accurately screens against multiple watch lists in real time, producing one of the lowest rates of false positives in the industry. Plus, its flexible architecture deploys quickly and it easily integrates with existing systems and other anti-money laundering and fraud management software. The speed, scalability, and flexibility of the cloud enable banks to maximize the efficiency of their transaction screening and grow limitlessly.
Adam Gable, Product Direct – Financial Crime and Treasury at Temenos highlights why Screen is built on the Microsoft cloud: “Azure is the world’s largest public cloud solution, trusted by 17 of the top 26 largest banks. It has broader threat visibility than any other cloud provider and behavioral monitoring that quickly detects and responds to malicious activity, reducing time to detection from months to minutes.” He goes on to add, “Microsoft complies with more international, national, and industry standards than any other cloud provider. Temenos Screen builds on this compliant, secured cloud to offer industry-leading sanction screening with unmatched scale.”
As today’s new trends become tomorrow’s banking norms, banks need to make sure their screening solution is ready to adapt. But adapting has never been easier, says Gable – “Our Screen solution is now available to explore through the Microsoft AppSource platform. Here, users can explore three powerful free trial experiences – Transaction Alert Manager, Watch List Manager and Knowledge Manager. So financial institutions can now clearly see how screening transactions has never been easier.”
[1] Computer World UK, 2016
[2] Temenos, 2013
[3] Microsoft, 2016
[4] The Atlantic, 2016
[5] The Atlantic, 2016
[6] The Atlantic, 2016
[7] PwC Global Economic Crime Survey, 2016
