The financial industry is increasingly looking to the cloud for its future. More than cost efficiency, financial giants are now banking on the cloud’s decentralization to respond quickly to customer demands while meeting their efficiency expectations.
Bank of Asia, as one of the world’s first fully digitalized global banks, is an early adopter of cloud computing to better allocate resources.
The bank started migrating its platform to the cloud in 2019 to reduce transaction time and cost, resulting in savings that it passes on to its customers. Most of its functions, including account opening, AML/KYC, and transaction processing, have been moved onto the Amazon Web Services (AWS) Cloud.
“Cloud Computing helps relieve some of the IT operational burdens, thanks to its shared responsibility model. After we migrated the core banking system to the AWS Cloud, IT costs for our core banking system have decreased by 50% and have remained low despite the increase in staffing required to shift from outsourcing to an in-house approach,” said Kevin Leung, head of IT at BOA Financial Group, the back-office of Bank of Asia managing its IT infrastructures.
With its core banking system running on the cloud, the bank also gained flexibility through APIs that allow it to connect its new system with existing ones.
For example, by introducing API-enabled architecture to its core banking functions, Bank of Asia was better positioned to extend its offerings through the open banking system. It allowed the bank to launch initiatives with some international payment platforms with diversified transfer options for its customers.
Bank of Asia expects more collaboration with the fintech industry. It plans to share the bank’s open APIs to introduce more personalized services to its customers and ultimately create additional revenue streams.
Being secure in an insecure world
The fast development of fintech has raised concerns over privacy and security issues.
The General Data Protection Regulation (GDPR), enforced in 2018, addresses these concerns. It requires business processes that handle personal data to be designed and built with consideration of the principles and provide safeguards to protect data.
A slew of measures was also rolled out in China, such as Regulations on Classified Protection of Cybersecurity (Draft for Comment) and Information security technology — Personal Information Security Specification/ They underscored the authorities’ efforts on securing internet information.
More than 60% of financial professionals said security is a crucial consideration in shifting to cloud computing when ranking the top priority, according to CAICT.
As a financial institution, the Bank of Asia takes security seriously. So, it set up migrating to the cloud step by step.
The bank first moved its supporting functions that require a relatively low-security level, such as the distribution system and marketing system, to the cloud. It worked as a test process to ensure the bank’s cloud is stable and secure, paving the way to eventually migrating the core system.
Inevitability in cloud
Looking ahead, adopting cloud computing is inevitable for enterprises, financial institutions in particular.
The migration process may be challenging to some extent, but with better-structured systems on the cloud, companies will see much more room for sustainable growth of the existing business.
The Bank of Asia sees cloud opening the door to new opportunities for developing new businesses and connecting to a broader range of clients.
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