Retail banking, insurance and the capital markets are fast adopting cloud computing in the quest to grow revenues, reduce costs and increase responsiveness to perceptions of risk. The financial sector is struggling to overcome uncertain growth of the economy, increasing regulatory pressure as well as customer cynicism to maintain profitability and enhance customer confidence in their product offers.
Against a background of increased wariness of tech-savvy customers, the need of the hour is higher interaction levels such as instant access to information online and delivery of products and services through handheld and desktop devices.
While many financial services companies have been responding to the new challenges by modernising their legacy applications and infrastructure up gradation, a number of forward-looking institutions are deploying cloud computing strategically with an intention to transform how the entire organisation operates. They are scanning and selecting from different models of cloud computing that will enable them to successfully meet the challenges and to improve their business agility. Business agility is the competence of an organisation to cost-effectively and swiftly adapt to environmental changes, according to the leading consulting firm, McKinsey & Co. When a company is agile, it is reflected in increased growth of revenue, greater reduction of cost, and more effective handling of business risks and threats to reputation.
Uncertainty of economic recovery, the highly-competitive environment and increasingly tightening regulatory framework are posing immense challenges to the growth of revenues. Significant impact has been made on American financial services by the Dodd-Frank Wall Street Reform and Consumer Protection Act. This, together with other imminent acts, are really squeezing the fee income of retail banks making it imperative for them to quickly devise new product and services that will provide the necessary revenue growth. Companies operating in the capital markets as well as debt relief companies are also coming under intense pressure to provide additional services to boost the diminishing revenues.