Today we will discuss how to walk the revolutionary road to a cloud-first banking future, a future that’s already here in the Middle East. Before we delve into the topic, let’s take a look at the latest precious commodity on bankers’ radars – customer data, or the “new oil.” This new oil is the reason why MEA leaders are jostling to win over banking customers—whether retail or corporate—and exploring new growth areas in a pandemic-stricken economy.
If data is the new oil then who might be the newest disruptors? Well, it’s not fintech anymore. It was not long ago that banking gurus touted fintech startups as the only potential threats. Just a few years have gone by and that zeitgeist has changed, thanks to neobanks and bigtechs. These new-age branchless banks like Liv or Ila Bank—along with bigtechs like Apple, Google and Amazon and fintech players like Credit Karma or Pepper—have set the battleground ablaze. Remember when ATMs used to be the benchmark for high-tech banking? Today, we live in a cashless world. The industry has certainly come a long way!
The increased sophistication and unmatched convenience these players are bringing to the banking sector threaten to put traditional players and their archaic approach out of business. This transformation is also translating into strong demand for a much broader range of highly customized product offerings as well as more strategic advice from banks, or should we say, financial partners.
Established banks, too, are under pressure to revolutionize their business models and infrastructure in a bid to make their services as appealing as neobanks. Otherwise, they risk losing their current and future customer relationships to these new digital challenger banks. In this disrupted market, tried and tested trust metrics like Net Promoter Score are also losing their relevance.
The Battle for Trust
|54% Trust at least one bigtech company more than banks|
|29% Trust at least one tech company more than their own primary bank|
|23% Would not recommend their primary bank|
It’s 2021. 65% Saudis are under the age of 30, a digital-native generation . And as you can guess, AI is listening to every heartbeat, capturing every movement of these consumers. New-age technologies like AI, ML and data analytics are at the forefront of the transformations we see in the world on a daily basis. Technology being the keystone of its Vision 2030, Saudi Arabia is also inching closer to achieving its goal of becoming the “intelligent financial center” by the end of this decade. This means that Middle Eastern banks have a few years in hand to bring about the massive structural changes required to regain their power.
There are two ways to bring about this radical transformation - developing analytics capabilities and applying digitization at scale at a faster pace than their global peers. As is often the case, any major structural change likely presents a slew of challenges exacerbated by the technological limitations of banks in the MEA region. Data quality and availability and lack of digital talent present significant roadblocks too. Moreover, yesterday’s operating models need to be overhauled and replaced by a whole new set of capabilities while establishing a new fintech ecosystem.
Per Cornerstone’s “What’s Going in Banking 2021” report, banks are already aware of the impact of the impending digital transformation. But it’s the challenges we discussed above are hindering their digital transformation journey.
Impact of Banks’ Digital Transformation Strategies, What’s Going in Banking 2021, Cornerstone
The MEA region is already witnessing an ambitious migration to the cloud. Banks must deliver exceptionally well on their cloud-first technology strategy in order to become digital leaders. The flexibility and availability of cloud would help banks improve their ability to churn out innovative products while optimizing IT spends.
As a pioneer in cloud technology and services, Cloud4C has been at the forefront of this transformation in the MEA. Only a few weeks ago, in May 2021, the prestigious MEA Finance Banking Technology Summit and Award 2021 has recognized us as the “Most Innovative Cloud Services Provider” in the region for our overall contribution as well as the innovative
At Cloud4C, we have created Bank-in-a-Box—an end-to-end cloud offering—in partnership with leading core banking and digital banking application providers. Bank-in-a-Box enables banks to meet the evolving customer needs for a self-service, automated, seamless, and omnichannel experience. As the banking industry progresses towards digital transformation and adoption of new technologies such as AI and IoT, Blockchain, Bank-in-a-Box offers a single solution for all their IT needs.
As certified AWS, Azure, GCP and Oracle Cloud partner having proven expertise in AWS Outpost, Azure Stack and Google Anthos, we have been delivering seamless, cost-effective digital transformation to leading financial institutions in Middle East including the central bank of Mideast, Doha bank, Mashreq, Dubai Islamic Bank as well as Abu Dhabi Securities Exchange. Our advanced banking solution is designed for public, private, hybrid and multi cloud set-ups coupled with 24x7 support. Guided by the industry’s best governance frameworks, our reporting acts as a watchdog for the financial institutions in their absence as explained in Figure
Bank-in-a-Box Governance and Reporting Framework
Recently, one of the top 5 private UAE banks was required to migrate its 243 business applications and 1,500 VMs spread across UAE within a stringent timeline while meeting strict compliance and security standards – all these without causing any business disruption. The banking leader leveraged the advanced assessment services offered by Cloud4C and experienced a seamless, quick and cost-effective transition to cloud with minimal disruption.
On the other hand, the largest Trading and Securities Exchanges in the Arab region was looking for a one-stop partner to assess and migrate its complex applications that include 250+ VMs, built by different vendors on multiple technologies. The Exchange was also required to migrate certain components of its data center to co-location facilities within 5 months. By leveraging our Migration Factory approach coupled with our managed services, a well-architected design solution on Azure was provided that helped the Exchange achieve its DC modernization goal without any hassle. As a one-stop shop for all cloud migration needs, we offered total ownership right from the migration to automation-enabled managed services.
Our Bank-in-a-Box solution helped both the industry leaders to accelerate their digital adaptation at scale by providing a single point of accountability coupled with pre-met regulatory compliance needs and end-to-end ownership. Figure 5 elaborates our comprehensive and flexible approach to ensure a seamless cloud transformation journey for banks-
Cloud4C’s cloud transformation journey for banks
Managing end-to-end solutions through Bank-in-a-Box platform
Last but not least, this wave of digitalization also brings with it a wave of cyber-attacks and BFSI sector happens to be in the sights of the attackers. For the banks of future, it is of utmost importance to stay at per with the cybersecurity norms in order to protect themselves as well as the vital data they carry from increasingly sophisticated attacks. Our Bank-in-a-Box suite is built to align with the demanding needs of security as it offers comprehensive security with 40+ controls and 26+ world-class security tools.
Cloud4C’s alignment to cybersecurity guidelines by the Central Bank of the UAE