Software is reinventing the world. Over the last decade, new technologies have disrupted virtually every industry, upending old ways of working and unlocking new opportunities. There are very few businesses that haven’t had to rethink their strategies to adapt to these new circumstances, and not even the most established industries are immune from feeling the effects of this shift.

The financial services sector is no exception. Over the past several years, a wave of innovation has swept through the market, driven by both challenger and established banks. These forward-thinking companies have taken advantage of newer technologies like cloud computing platforms, API integrations and mobile applications to deliver banking services to customers in a way that’s faster, more agile and more accessible than in the past.

More and more customers are choosing not to queue in a physical branch when making changes to an account or depositing funds. These changes in consumer expectations have driven a shift towards all-digital models – many challenger banks operate with no branches and minimal customer-facing support staff, while established banks have launched sweeping IT modernisation programmes in order to meet and surpass customer expectations. Apps have been overhauled to a mobile-first standard, while performance and stability have been improved to reduce wait times and make overall customer experiences less frustrating.

There is now a much greater emphasis on smooth, pleasant and modern customer experience journeys, with carefully designed user interfaces that minimise confusion and allow customers to swiftly navigate through them to their desired outcome. Financial institutions leverage these robust digital platforms to deliver on all of their customers’ needs, including everything from automated virtual agents that can answer queries, to AI systems that can speed up complex tasks like loan approvals. 

One of the key technologies behind this is the cloud. Before the widespread availability of cloud computing, setting up the technology infrastructure needed to provide financial services would require an enormous investment in data centre hardware and qualified technicians to manage it, in addition to the development costs of building and maintaining customer-facing digital apps.

Now, however, platforms like Microsoft Azure allow all the necessary infrastructure to be put in place almost instantly, and paid for based on consumption, drastically lowering the barriers to entry for new organisations, and opening opportunities for existing banks to modernise and innovate. Similarly, Azure can also provide access to cutting-edge capabilities like advanced data analytics and AI training models, which enables organisations to deliver a wider variety of services with minimal outlay. In many cases, this offers more stability than privately hosted infrastructure, with lower latency and greater reliability.

Low-code/no-code application development tools Like Microsoft Power Apps are an ideal complement to this, and allow employees to rapidly create and expand apps with no technical knowledge. This allows slick, modern apps to be created in very short timeframes, and connected to Azure cloud services to take advantage of the scalability and advanced features that it brings with it.

It’s not just banking that has been disrupted by this shift. Other consumer financial product sectors including insurance, mortgages and general lending have also seen an influx of new digital-native startups enabled by this new technology, while established companies have leveraged these tools to create a smoother and more pleasant experience for customers. On top of that, the same strategy has allowed traditionally exclusive services like stock trading and investment to be opened up to a wider consumer market through accessible and user-friendly apps.

While offering new financial products and reinventing customer-facing services have been the most visible ways in which financial sector companies have made use of cloud technologies, these new capabilities have had an enormous impact on their internal operations, too. These new IT resources have enabled financial services organisations to make efficiency gains and cost savings in a number of areas.

For example, in addition to lowering the barrier to entry for new organisations, shifting workloads to the cloud allows organisations to move IT infrastructure expenses from a CapEx model to OpEx. Because they’re more predictable, OpEx costs are easier to budget for, and don’t require large amounts to be set aside for upgrade projects. 

Moving workloads to the cloud also enhances the potential for innovation. The world of modern finance is complex and fast moving, and businesses in the sector depend on having up-to-date information. Cloud-based infrastructure allows organisations to harness data on their customers’ behaviour and use of their services far more efficiently and effectively, accelerating the creation of real-time data analytics dashboards, which ingest data streams from a variety of sources to ensure that businesses can make data-driven decisions based on live market information.

Security is more important in banking and financial services than arguably any other industry, and fintechs need to ensure that their customers can put their trust in their technology. For this reason, secure, encrypted integrations between apps and services have become a vital part of financial organisations’ infrastructure. In addition, the enhanced, in-depth security offered by platforms like Azure offers businesses peace of mind that their customers’ data is going to remain secure, and built-in compliance toolkits allow them to stay on the right side of regulations without unnecessary burden.

In many ways, the financial services sector has changed more in the last ten years than it has in the last half century. Banking is in the middle of a revolution that will continue to rewrite the rulebook for years to come, and the market may look very different in the future. For organisations that want to stay ahead of this curve, harnessing the innovation unlocked by modern cloud services and next-generation application experiences is the best way to ensure that they can spearhead this trend and lead the way into the next generation.

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