5 Ways Cloud Is Helping Banks Drive Operational Resilience
The ability of cloud-based systems to deliver faster payments and treasury insights took on an added importance during the pandemic.
Traditionally, financial services organisations or banks were hesitant to migrate to the cloud because of security and compliance concerns. However, shifting consumer expectations and the Covid-19 pandemic forced them to rethink their business models.
Now, many financial institutions that were previously cloud-shy have become cloud champions as they realise the opportunities cloud computing can offer in terms of scalability, cost savings, security and compliance, and innovation through access to technologies like big data analytics and machine learning.
Banks are increasingly focusing on operational resilience, reflecting the growing dependency banking systems have on complex systems, automation and technology, and third parties.
Operational resilience is the ability to deliver operations, including critical operations and core business lines, through disruption from any hazard. Operational resilience needs to be understood as the desired outcome instead of a singular activity and the approach to achieving the outcome. It addresses many operational risks, including cybersecurity, pandemics, environmental and infrastructure, geopolitical, third-party risk, and technology risk.
Here are five ways the cloud can help banks drive operational resilience:
1. Follow Regional And Sector-specific Regulations
Providers like Google Cloud offer globally and regionally resilient infrastructure, data centres and support. The global footprint of 24 regions and 73 zones allows them to serve customers in over 200 countries with a globally distributed support function. They can support customers even in adverse circumstances and allow business transformation across banking, capital markets, insurance and payments to support data-driven innovation, customer expectations, and security and compliance needs.
Also, from encryption by default and Titan security chip to high-scale DOS defences and Google Cloud data analytics, it helps banks secure their environment.
2. Reach Customers Via New Digital Distribution Channels
Retail banking is transitioning from face-to-face transactions to online transactions, with 80 per cent of all customer touchpoints occurring on digital channels. This resulted in customers sharing more data in return for a personalised banking experience and benefits such as reward points.
So, while the industry is moving to real-time, retail banks should contend with additional challenges because of legacy data and infrastructure. There’s an urgent need for retail banks to digitise rapidly to remain relevant.
Google Cloud Platform helps banks to reach customers via new digital distribution channels through Open Banking FinServ Solutions. It’s a system that allows access and control of consumer banking and financial accounts through third-party applications. It encourages interoperability between banks and consumers by making available the bank’s core services and accelerating their digital transformation.
With an example of the eCommerce industry that offers last-minute Chromebook deals, let’s understand it develops a new app experience using Google Assistant. You choose and finalise a product from the Pixelbook Deal Store. After which, Google Assistant will ask your preference whether to pay now or pay later and lets you choose the bank you use. It will take a confirmation before linking your bank account. Also, to be noted, linking the bank account with your google is for consumer experience customisation. Financial data or authentication data will not be collected via the conversation interface. It will let you review the terms and conditions. After completing the process, you will get a confirmation receipt via email.
It provides an opportunity to build new customer channels with more control over the data and enhance interoperability between traditional banking data and an API ecosystem.
3. Offer A Cost-effective Solution To Customer Support
Google Cloud’s intuitive Contact Centre AI offers retail banks a cost-effective way to improve caller experience and operational efficiency. Contact centres struggle to keep up with rising customer demands and look for solutions that help in improving customer experience. However, current contact centre solutions are expensive and time-consuming to set up and run.
Solutions like interactive voice response (IVR) are quite helpful but not always meet the customer needs or customer expectations. For retail banks, customer satisfaction is important to ensure, as 30 per cent of critical customer interactions at banks occurs in contact centres.
Using Google Cloud Platform, you can transform your contact centre by providing a better customer experience at a lower cost with Contact Centre AI.
- Generate human-like text-to-speech and speech-to-text conversations
- AI-powered virtual agents with ML for adaptive routing
- Run auto-tuned, AI-driven speech models on tensor processing units (TPUs)
- Receive surface relevant insights and bank account holder information in real-time to agents
- Integrate with existing technology systems for a seamless omnichannel experience
Benefits across the banking ecosystem:
- Agent Reskilling: 10–25 per cent faster leads handling
- Churn Reduction: 0.2–2.5 per cent better call experience result in lower churn, and enhanced insights flag at-risk customers.
- ARPU Increase: one to three per cent increase in average revenue per user
4. Run Risk Calculations To Test New Products
Banking services institutions require increasingly complex risk calculations to stay updated with market movements. Analysing portfolios and forecasting potential P&L are the biggest priority and responsibility. Usually, FinServ organisations conduct formal risk modelling — value-at-risk (VaR) and other calculations to mitigate risk, ensure financial control and make well-informed trading decisions. To do this, all the banks or FinServ institutes need to aggregate the risk assessments from positions held by different trading desks, portfolios and departments within the institution.
The challenge lies in VaR valuations which use historical methods requiring significant computations resources. It can take a virtual server farm to handle the operation. Organisations don’t have an extensive amount of infrastructure on site.
And that is where Google Cloud comes into the picture. Its high-performance computing grid offers all the resources you need to perform timely risk calculations and simulations efficiently, effectively, and in the most cost-effective way. Google Cloud delivers a high-speed data processing platform required for complex VaR calculations.
5. Automate Data Capture To Fast Track Processes
Nearly all businesses or banking related processes begin, include or end with a document. Almost all organisations are sitting on a document goldmine. PDFs, emails, customer feedbacks, patents, contracts, technical documents, sensitive documents and HR files. All these documents grow with time. A lot of these documents are unstructured.
Document processing is quite a complex process. Google Cloud Document AI extracts structured data from unstructured content. Document AI enables businesses to unlock insights from unstructured documents with the help of machine learning. This can enable businesses to make better decisions, such as analysing customer feedback, processing invoices, or reduced mortgage processing times. Document AI can extract as well as classify information from unstructured documents.
Originally published on: Datatechvibe