Financial services in Africa such as banks and insurance firms are beginning to embrace cloud as they seek to modernize their solutions. The bank of 2030, according to Deloitte, will look very different from today. Facing changing consumer expectations, emerging technologies, and alternative business models, banks need to start putting strategies in place now to help them prepare for this future.
Banking and capital markets leaders in the region are increasingly recognizing that cloud is more than a technology; it is a destination for banks and other financial services firms to store data and applications and access advanced software applications via the internet.
Last week, technology leader IBM announced that major financial institutions across Africa have selected its hybrid cloud and AI capabilities to unlock digital innovation. These banks include EcoBank, Nedbank, Attijariwafa Bank, United Bank of Africa, Co-operative Bank of Kenya, and Banco Mais.
Telecommunications and network provider BT also announced a portfolio of industry-tailored solutions to help financial services firms take a controlled approach to adopting cloud. BT Cloud Control for Financial Services helps customers’ IT teams address the challenges they face in balancing the risks and rewards of moving their applications and secure data to the cloud; it helps chart the path to growth and delivering outstanding digital experiences.
Cloud allows financial institutions to modernize their operations and truly adopt all aspects of digital transformation. It makes new product and services easier to develop and also allows banks to not heavily invest in dedicated hardware and software with a limited shelf life, nor the manpower to maintain it. Instead, financial institutions can buy into the infrastructure of a secure, dedicated cloud service provider and focus on driving more money into their business.
In 2020, a new report co-authored by Genesis Analytics (the largest economics-based consulting firm in Africa) and Orange Business Services, with the support of the Bill & Melinda Gates Foundation, concludes that cloud computing solutions could help African banks to reduce costs significantly and provide financial services to poorer people who are currently either underserved or unbanked. The report highlights the critical role that regulators should play.
Cloud computing, the report noted, creates an opportunity for financial service providers to rethink their technology investment and significantly reduce costs by using Internet technologies to provide virtual infrastructure that is scalable and delivered as a service. ICT infrastructure and service costs are lower and utilization is higher while helping overcome any ICT skills scarcity.
‘’Cloud adoption—including hybrid and multi-cloud adoption—is expanding fast among both private and public sector organizations of all sizes,’’ she said.
‘’Financial services is the exception to the rule. Instead of rushing to the cloud, banks, credit card and payment companies, and insurers are likely to move toward hybrid or multi-cloud models at a measured pace over several years or more, and the pathways of adoption will include banking software vendors as well as large cloud service providers.’ she added.