Ron Daly, President/CEO
Virtual StrongBox, Inc.
Almost every week, I encounter bank CEOs or IT executives who tell me they don’t have the bandwidth to move to cloud computing. Some think they don’t need it. Others think it’s gimmicky. Most are anxious about data security. For example …
“Yeah, we’ve thought about it, but we have a lot invested in our current systems.”
“Cloud? That’s something we want to look into next year. Right now we’re up to our ears in a core conversion and our employees are maxed out.”
“I worry about how easy it is to hack the Internet. We’ve already had one DDoS attack.”
I hate to say it, but that’s so “last year” thinking! Most financial institutions have legacy systems they can’t easily replace. But there are ways to connect existing systems to cloud technology, which can connect to the consumer’s technology – gaining the best of both. Here are three good reasons why a la David Letterman style:
#3 Cut staff overtime
Outdated workflow processes can quickly drain the budget, but automating routine activities, like onboarding new customers and processing mortgage papers, allows banks to use staff more efficiently. In its most recent Cloud Survey Report, KMPG noted top uses of the cloud are to drive cost efficiencies, and allow for a more flexible and mobile workforce. With the Department of Labor’s proposal to increase salaried employees’ threshold for overtime, remember: You don’t have to pay computers to work overtime, they never get sick, are dependable and don’t mind routine tasks.
#2 Data security
Many banks cite security as the top barrier to adopting cloud technology. That’s largely because free or add-on commercial solutions can be risky, with all data stored together in the “public” cloud. That doesn’t work for financial institutions, which must safeguard customers’ personally identifiable information. At Virtual StrongBox, each customer has her own digital safe-deposit box that only she can open or allow access to others, like the bank, for specific documents. The service also meets bank regulatory compliance rules, and participating institutions can safely exchange loan documents and other PII with their customers, using our patented encryption-at-rest data security and file-exchange solution.
#1 Customer engagement
Cloud technology can connect legacy bank systems to customers’ technology. That’s important because people don’t hesitate to use smart apps today. They receive texts on their car dashboards, order books on Kindle and buy music on their phone. The best way to keep customers engaged is to deliver banking the same way: Provide a consistent, satisfying experience across all channels and make them feel they are more than an account number. A quality fin-tech partner can help you personalize customer interactions online or via mobile banking, just as if they walked into the branch.
I wonder: How many bank execs thought they didn’t have the resources to implement ATMs, drive-up windows or online banking? Legacy banking systems represent a big investment; but against new technology, they quickly become outdated. Cloud technology can work with legacy systems, eliminating the need for add-on apps. It also can streamline back-office functions, and make banking more convenient and easy for customers.
KMPG’s report noted, “Driven by the demand for speed, flexibility, scale and anywhere access, consumers have fully embraced a cloud-enabled world.” The financial industry needs to do the same.
To stay competitive, it’s time to figure out how to become consumer-obsessed and focus on a “consumer-first” strategy. Banks that delay the inevitable risk current and future customers, who will start looking for other banking alternatives.