How cloud technology is transforming the financial services industry

Two major challenges for any modern business: keeping pace with rapidly evolving technology and tools; meeting the needs of increasingly demanding customer bases.

These issues are particularly acute in the financial services industry, but the proliferation of the cloud is serving to provide a solution to both problems in one fell swoop. A solid cloud infrastructure not only creates a platform for customer convenience and better service, it can be freely scaled to incorporate new tools and services as they are required.

To find out more about how the cloud is benefitting the finance industry, we spoke to John Davis, MD of cloud firm BCSG.

TechRadar Pro: For the uninitiated, what's the key benefit of cloud technology?

John Davis: Cloud computing makes everything available from any connected device; by putting your files, games and photos in the cloud, it means that you, or anyone else that you allow, can access those things from any mobile, tablet or computer that is connected to the internet.

This works for applications as well: so you don't need Word loaded onto your desktop, you can access that through the cloud meaning you can edit your files from any device.

This makes software rentable at a low monthly cost instead of a big upfront price – and it makes your things accessible anytime, from anywhere.

TRP: Looking at the financial industry, what are the biggest challenges facing banks today?

JD: I would say the biggest challenge is finding a way to meet changing customer expectations. Small businesses now want their banks to take an interest in what they do and to really feel like they're on the same side.

What actually tends to happen is that small business customers get a good service from a bank when they first start up with them, but once they've opened their current account this fades.

Banks simply can't resource a personalised service for each and every one of their hundreds of thousands of small businesses. So the challenge for the bank is to balance the need to manage their own costs with the need to make the small business feel like they're really there for them.

TRP: Why do value added services (VAS) matter to banks?

JD: In order to demonstrate to a small business that you care about them you need to think about more than simply whether their cheque has cleared. You need to consider the tools that really help them day to day.

These cloud based tools set up a different sort of relationship. There develops a digital relationship between the bank and the small business which can create more quality touchpoints and can be very helpful in leading the bank down a lower cost to serve model.

TRP: How is the relationship between banks and small businesses evolving?

JD: Banks are attempting to demonstrate an active interest in small businesses but at the same time are seeking to create more digitally focused relationships.

These two ideas may originally seem to be at odds, however if you really deliver digital well, for example if you think about the way we interact with Apple via our iPhones or with Amazon, then it can be very effective. They have managed to create a set-up where it feels personal and banks should aspire to do the same.

TRP: How can cloud-based services help small businesses?

JD: Historically a lot of these tools were only really created for larger businesses. The cloud has in some ways democratised the market.

Some of the tools around accounting and winning new customers, some of the solutions to the main headaches that small businesses face, are suddenly available as self-service, low cost, monthly subscriptions which a small business can afford.

TRP: What kind of commitment will using the cloud system require from businesses?

JD: It's the due diligence to find out which applications will suit a business that takes time. You have to figure out which ones are value for money and which ones are genuinely tailored to small business requirements.

This is why we work with the banks and Telcos to try to curate the market and to put the best apps in front of small businesses instead of them having to go through an overwhelming catalogue themselves.

These programmes are generally relatively easy to use but there is always a learning curve to get them up and running. This is exactly the same as would be experienced with any Microsoft software.

TRP: What is the secret to launching a successful cloud services platform?

JD: It's important that you don't just put the platform up there and expect everyone to pitch up and start using it automatically. It is vital to find a way to bring it to market in a compelling way for your customers - so that they know it's there and they understand what the benefits are.