Digital banking quickly became standard for consumers nationwide as the pandemic cemented a shift to mobile that had been years in the making. Consumers expect targeted and personalized digital banking experiences rather than one-size-fits-all. Forty-six percent want personalized help from their financial institutions (FIs) in avoiding fees, for example. Another 46% expect their banks to provide customizable account balance alerts.
Cloud technology could be a game-changer for banks and has already been a key driver of success across various industries. Seventy-eight percent of executives say their companies have adopted cloud technology in most or all of their daily operations. Data analytics has been a particularly fruitful field for the cloud, with 86% of surveyed companies deploying it. Banks can use the cloud similarly to other industries, leveraging it to harness more advanced data analysis while offloading core systems away from limited on-premises technology stacks.
The “Digital-First Banking Tracker®” examines how cloud technology can help banks augment their digital transformations and the challenges FIs face in its implementation.
New research finds that 51% of banks moving toward cloud technology are doing so to strengthen cybersecurity. Thirty-nine percent hope to improve their fraud detection, and 34% aim to improve claims management. All three areas benefit significantly from the cloud’s improved data science capabilities, with 34% of FIs citing these as core objectives. Other benefits include the ability to share or collaborate with users and use cloud-enabled data marketplaces. These benefits could significantly reduce the time the average organization devotes to data management, currently at 40%.
A recent survey found that 81% of Canadian consumers use digital banking tools for all or most of their banking. Another 46% say they plan to increase their use of online banking in the next year. Just one-third of Canadians said they could live less than one day without digital banking, comparable to those who said the same for such essentials as cars and air conditioning.
For more on these and other stories, visit the Tracker’s News and Trends section.
The financial industry is at a turning point in its history as more users flock to digital banking. FinTechs and challenger banks offer holistic financial products that could replace traditional FIs altogether for this customer base. Legacy banks must pull out all the stops to keep customers, and cloud technology can be beneficial in this process.
This month’s PYMNTS Intelligence examines how cloud technology enables digital transformations and how financial institutions can overcome hurdles to implementation.