<div><p class="MsoNormal" style="margin-bottom:0cm;line-height:normal">Times are changing,
and more and more industries are relying on cloud infrastructure for various
services. Last year, 88% of organizations across the world were using cloud
services, which raked up to 90% this year, depicting a steady growth in the
adoption of cloud services. However, the banking industry, owing to various
challenges, needs to catch up in its adoption. <o:p></o:p></p><p class="MsoNormal" style="margin-bottom:0cm;line-height:normal">Amazon Web
Services, Microsoft and Google are some of the major cloud service providers.
It is estimated that over the next few years, 1 billion tonnes of carbon
dioxide emission can be avoided by replacing current IT systems with cloud
computing.<o:p></o:p></p><p class="MsoNormal" style="margin-bottom:0cm;line-height:normal">Climate change is
ringing alarm bells across every sector of the economy, prompting companies to
use sustainable measures. Realizing what potential cloud computing has, banking
companies are becoming more open-minded toward the approach of green banking.
Banks are put in a unique, influential position wherein they can control the
money flow and ensure it is used for green business practices. 61% of bank
customers in the UK expect their banks to create a more positive and
sustainable impact on society. A survey conducted among banks in the Netherlands,
United Kingdom, and Germany found that 31% of them were concerned about
sustainable banking. Twenty-seven green banks were created across 12 countries
in 2021; the number is supposed to increase in the years to come.<o:p></o:p></p><p class="MsoNormal" style="margin-bottom:0cm;line-height:normal">&nbsp;</p><h2 style="margin-bottom:0cm;line-height:normal;mso-outline-level:
5">What is Green Banking?</h2><p class="MsoNormal" style="margin-bottom:0cm;line-height:normal">Simply put, green
banking is the activity of investing in or funding projects aimed at
sustainability and mitigating climate change. The banks which indulge in these
activities are called green banks. These banks' priority is to promote the
growth of a climate-friendly economy rather than making profits. Some of these
banks additionally help in uplifting the low-income group population. Equal
income distribution can play a great role in sustainability and ensures that
the money spent is used responsibly, utilized to its full potential, and
returned. As a result, they focus on markets where there is less risk of
default. Green banks promote cheaper and cleaner energy, rapid deployment and
more investment.<o:p></o:p></p><p class="MsoNormal" style="margin-bottom:0cm;line-height:normal">In April 2021, the
net-zero banking alliance was formed, committed to sustainability and performing
based on a net zero target by 2050. This alliance was launched with 43 founding
members, and by December 2021, the number went up to 98. However, 52 of these
banks are located in Europe and the rest in North America. The banks are
required to publish their progress each year. Surprisingly, Bangladesh Bank is
one of the first Central Banks to promote Green Banking activities. In 2011, it
issued clear guidelines and protocols for Green Banking activities to banks and
NBFCs'; the deployment needs to be more cohesive and reach all the countries
uniformly. <o:p></o:p></p><p class="MsoNormal" style="margin-bottom:0cm;line-height:normal">&nbsp;</p><h2 style="margin-bottom:0cm;line-height:normal;mso-outline-level:
5">How Does The Cloud Benefit Green Banks?</h2><p class="MsoNormal" style="margin-bottom:0cm;line-height:normal">Let's look at some
data on why banks are looking forward to adopting the cloud; 42% is because of
simplified IT infrastructure, 20% due to cost reduction, 17% for innovation,
15% for security, 4% due to a wide range of choice and flexibility and 2% for
customer centricity. Cloud computing offers lower infrastructure costs and
greater operational efficiency. Banks require massive data centres, which are
really carbon-intensive. By replacing these data centres with the cloud,
banking can be made much more sustainable and immune to physical losses. Since
everything is online, these services must stay updated with the latest security
threats, offering greater protection.<o:p></o:p></p><p class="MsoNormal" style="margin-bottom:0cm;line-height:normal">&nbsp;</p><p class="MsoNormal" style="margin-bottom:0cm;line-height:normal">Moreover, this
software uses computing power efficiently by minimizing the idle time of
computers. However, the success lies in choosing the correct cloud computing
model for each service area of the bank: SaaS is used for customer relationship
management, PaaS for infrastructure development and testing, and IaaS enables
banks to outsource their operations without personally buying the cloud
services. The pandemic has made customers more eager to have services at their
fingertips, and banks are obliged to keep up with the trend. Cloud gives banks
access to software that lets them provide service to customers. They are part
of the SaaS model, so banks fully control them. Some software, such as the
Temenos Banking Cloud, can help banks track their carbon insights to align
themselves to their ESG (Environmental, Social and Governance) goals. EQ bank
is the first bank in Canada to be fully hosted on the cloud; it uses the
Temenos Banking Cloud. The bank also recently announced that it has become
carbon neutral. Another example is the Italian digital bank, Flowe, which is a
cloud-enabled carbon-neutral digital bank and the first bank in Italy to get a
B-corp certification.<o:p></o:p></p><p class="MsoNormal" style="margin-bottom:0cm;line-height:normal">&nbsp;</p><h2 style="margin-bottom:0cm;line-height:normal;mso-outline-level:
5">Conclusion</h2><p class="MsoNormal">



























</p><p class="MsoNormal" style="margin-bottom:0cm;line-height:normal">The time is ripe
for banks to consider their ESG goals. International calls for action are
increasing the market demand for sustainable banking products. Moreover,
economic policies worldwide promote the growth of a green economy. The
sustainable finance market is worth over 30 trillion dollars! Some suggest that
it might take 3.5 trillion dollars annually to transition into a green economy
and reach net zero goals. This is associated with many ESG issues, and the
banks must address that. The signatories of Principles for Responsible banking
have addressed climate change, enhancing gender equality and financial
inclusion as their primary ESG goals. We have understood the importance of
cloud computing to achieve these goals. The involvement of tech giants like
Google, Amazon and Microsoft reaffirms the belief that the cloud is the future
of banking. However, we should recognize the challenges of a cloud-based system.
Stakeholders worldwide must weigh the advantages against the disadvantages and
decide wisely. After all, sustainability is achieved when well-informed, wise
decisions are taken.<font color="#0e101a" face="Times New Roman, serif"><span style="font-size: 12pt;"><o:p></o:p></span></font></p></div>

Swarnendu Acharjee

Are Cloud Platforms The Future For Green Banking?

<p>Capital One surprised technology and business analysts by shutting down its physical data centres and moving them all to Amazon Web Services. Even at that time, it was highly unlikely that Capital One would be the last major bank to make the transition to an all-cloud IT environment.</p><p>The cloud offers lower costs and greater scalability, which are attracting more and more financial services firms. A wide range of resources can be spun up elastically and run at scale, allowing financial services firms to develop better digital offerings and customer engagements, as well as keep pace with growing customer bases.</p><p>Cloud adoption also enhances productivity, attracts talent, and provides security. While most financial services organizations have remained on the sidelines for many years, they are finally recognizing the cloud's benefits.</p><p>As a result, they accept cloud computing more readily, have seen its successful deployment in the financial services industry, and are becoming more adept at managing risk as well as leveraging it.</p><p>Banks have moved ahead with plans for digital transformation to provide a more interactive user experience in response to the pandemic. Banks are migrating applications to the cloud, preferably using cloud-ready apps.</p><p>Cloud mainframe emulators exist, but they don't match up to software developed specifically for the cloud. Banks should view moving to the cloud as an opportunity to upgrade technology.</p><p>Customers are finding that analytics on-prem and processing data is becoming increasingly challenging. Some financial firms have created huge data lakes to circumvent product silos. The data can quickly become swamped if there is no common taxonomy. A cloud-based solution can facilitate these processes.</p><h3 id="use-cases">Use Cases</h3><p>Several financial services firms are exploring cloud technology to implement innovative new services and practices. Connecting to third-party apps, for instance, is likely to result in new customers and revenue.</p><p>The payment process for ridesharing services has historically relied on connecting passengers' peer-to-peer payment apps or debit cards. This kind of connectivity and then the ability to use fintech apps require the cloud.</p><p>The cloud is being used to host complicated technologies such as data marketplace and data warehouses. Organizations can create a consistent data delivery strategy quickly by leveraging this technology.</p><p>Additionally, the cloud allows firms to test new apps and online services more cost-effectively, as well as reduce their costs by eliminating the need for on-premises equipment.</p><p>On the other hand, you can expect banks to expand into new markets and compete in ways they couldn't imagine before, boosting their revenue and scaling up at previously unimaginable rates.</p><p>Answers to critical business questions are urgently needed by financial services firms. The answers might not be ready for business the next day if a firm even ran a nightly job to answer daily questions before cloud computing. Despite this, this scenario happens more frequently than you might think, and the delay in getting the required information can have serious financial consequences.</p><h3 id="ai-and-machine-learning">AI and Machine Learning</h3><p>Also, a large amount of interest is being shown in the use of fast and large-scale databases for machine learning. With the emergence of AI and machine learning, cloud computing has also shown great promise, including automated loan processing and fraud mitigation chatbots for customer service, a field where cloud computing provides great value because it turns unstructured data into structured data.</p><p>As the mortgage industry grows, clients are increasingly turning to the cloud for AI solutions and document management for servicing and mortgage origination.</p><p>Cloud-based data storage can make it easier for investment professionals and data scientists to work efficiently and get access to fast and scalable data storage.</p><p>On the other hand, the cloud gives financial service firms an opportunity to update ageing systems without investing in costly capital projects. Several of the payment systems in use today are quite archaic and are still being modernized rapidly.</p><p>With cloud-native applications, adopters have access to the latest technology and talent, which enables them to rebuild transaction processing systems that can handle very high volumes with low latency. By moving their platforms to the cloud, they become leaner and more agile.</p><p><strong>Many use cases are no longer off-limits to the cloud as they used to be.</strong></p><p>In the cloud, even core banking has found a home. Yet, controlling and protecting sensitive data is still a major concern that may impede a move to cloud management and control. Fintech firms are embracing both private and public clouds. While cloud service providers developed their security and compliance offerings and increased transparency, the private cloud was the natural progression from traditional server-based infrastructure. Because of the diverse array of cloud-native services now available on the public cloud, plus the associated compliance and resiliency, the public cloud offers a compelling value proposition.</p><h3 id="takeaway">Takeaway</h3><p>Some of the world's most guarded organizations are financial services firms, mostly due to stringent regulations and the security threats they face as global economy players. Despite these challenges, financial services firms have demonstrated that it is possible to benefit from all the benefits of public cloud infrastructure and still remain highly compliant and secure.</p><p>Last but not least, a lot of retail banking innovation is now taking place in the cloud. Fintech companies of the new generation are primarily cloud-based. If you choose to only play on-prem, you will miss out on the cutting edge.</p>

Hamid Akhtar

Cloud Gaining Traction in the Financial Services Industry

<p>Financial institutions are progressing at a breakneck speed from a technology standpoint. In banking and finance, the need for and demand for improved technology is driving the system to modify strategy, establish new models, and ultimately satisfy client expectations. Banks are now discovering intriguing new methods to transform their data into actionable information. Cloud-based solutions offer the best storage and capabilities for managing large amounts of data while also making data and insights easily available to analytics and the business.</p><p>This article will help you in understanding the power of the cloud in management and how cloud-based platforms are helping in transforming and uplifting the banking industry. But first, let us properly go through the concept of cloud computing.</p><h2 id="understanding-cloud-computing">Understanding Cloud Computing</h2><p>Cloud computing is the on-demand distribution of computer services through the internet, including software applications, data storage, and processing power. Rather than investing in contemporary computer infrastructure, banks and credit unions can employ cloud computing solutions to supplement or replace the services provided by their present data centers. This saves businesses money and time in the long run by avoiding the upfront costs and complexity of owning and managing increasingly sophisticated IT systems.</p><p>Expenditure on cloud computing solutions continues to rise as a result of the demand for modernized back-office technology, while spending on conventional, in-house IT continues to decline. Vendor-provided public cloud services, private clouds constructed by a financial institution, and hybrid cloud solutions that combine a private cloud with one or more public cloud services, utilizing proprietary software to ease communication between the two, are all options.</p><h2 id="why-is-cloud-better-than-traditional-banking-platforms">Why is Cloud Better Than Traditional Banking Platforms? </h2><p>On many levels, analytics from a cloud-based platform may be beneficial. Real-time information on marketing campaign ROI, for example, is a crucial statistic for a chief marketing officer that is not readily available or actionable with today's on-premises solutions. A chief information security officer, for example, may have access to data that improves a bank's governance skills, resulting in security and compliance advantages. Banks are also using Google Cloud's open APIs to authenticate and protect financial conversations with consumers, allowing for the transfer from face-to-face  digital channels.</p><p>For data warehousing and data management, banks can employ a variety of cloud-native services. Furthermore, successfully integrated AI and machine learning tools may assist automate chores and creating personalized experiences. The elastic capabilities of cloud computing, for example, have been proven to reduce data model training time by more than half when compared to traditional on-premises systems. Data models converge more quickly, allowing for speedier service delivery to markets and better service to customers. Banks can also use high-performance computing (HPC) facilities to handle enormous amounts of data. Cloud computing offers banks with current options for HPC, which are manifested in containers and purpose-built hardware devices such as graphics processor units and tensor processing units.</p><p>Another significant advantage of migrating to the cloud and utilizing managed services is that programs may be handled uniformly across several settings. Working in a more efficient development environment allows banks to bring new goods and services to the market more quickly and simply upgrade them. Traditional and older on-premises data infrastructures can't handle the volume of data or real-time data streams required for sophisticated business analytics and AI. It is necessary to have a contemporary data architecture. Furthermore, banks can flexibly scale infrastructure up or down to meet demand in a cloud environment, which is critical for digital success.</p><h2 id="the-future-of-banking-with-cloud">The Future of Banking with Cloud:</h2><p>Embracing the cloud is crucial to a successful digital banking revolution. While there have been concerns about cloud security and regulation in the past, cloud computing solutions are becoming more common in the market for both traditional and non-traditional financial institutions. All but the largest financial institutions lack the computing capacity needed to exploit data and apply sophisticated analytics, machine learning, and artificial intelligence. The good news is that numerous cloud-based solution providers, such as IBM, have developed industry-specific solutions for the banking sector.</p><p>In the future, banks may improve their customers' experiences in a variety of ways by using cloud data:</p><blockquote>When leveraging third-party apps and services to improve the client experience, a more secure environment is created.</blockquote><blockquote>The ability to deliver solutions directly to consumers' messaging applications or to deliver quick solutions to the customer's phone, resulting in personalized experiences.</blockquote><blockquote>Even during peak hours, quicker transaction speeds are possible.</blockquote><blockquote>Real-time checks, for example, may be accessed more quickly and easily.</blockquote><blockquote>Recommendations for investments and savings that are optimized.</blockquote><blockquote>Personalized offerings and solutions based on solid analytics.</blockquote><p>According to IBM, ?Organizations have an enormous opportunity to leverage cloud computing to drive innovation and improve their competitive position. Cloud computing ? whether private, hybrid, or public ? enables organizations to be far more agile while reducing IT costs and operational expenses. In addition, cloud models enable organizations to embrace the digital transformation necessary to remain competitive in the future.?</p><p>Not only is the cloud assisting in the innovation of IT strategy, but it is also becoming an engine for rapidly developing new capabilities and services to meet business needs. Many transformational solutions (for example, customer relationship management, finance, and enterprise resource management) are already cloud-based?they're simply not advertised as such. A cloud business case should highlight how the bank can use cloud-delivered solutions to generate customer insights, experiences, and offerings, as well as grow revenue, reduce expenses, locate and onboard better personnel, and provide more uniform corporate operating platforms. It should also incorporate a baseline cloud value-assessment model to help with scenario planning by mapping the economics of shifting market dynamics, pricing, and business assumptions.</p><h2 id="end-note">End Note</h2><p>The bank of 2030 will be substantially different from the one we have now. Banks and other financial services businesses are quickly realizing that the cloud is more than a technology; it is a place where they can store data and applications and access advanced software applications over the internet.</p><p>Business unit and IT executives who are used to working with on-premise data centers may find the notion of updating or replacing outdated systems with an enterprise-level cloud solution intimidating. Fortunately, banks may take this shift step by step. Depending on their organizational goals, maturity, and preparedness, they can mix and match hybrid and multi-cloud solutions; most businesses opt for a multi-cloud strategy. Data stored in the cloud can be as (or more) secure as data stored on-premises, regardless of the deployment type.</p>

Top Writers

Subscribe to Magazine