Meta Description: In 2024, we should anticipate more surprises based on the patterns of the last several years. These are the five themes that Cloud will most significantly affect the financial services industry in the upcoming year, if your organization is a financial institution or has strong relations to the sector.
It is anticipated that in 2023 and the upcoming years, the use of cloud computing in the financial services industry would continue to expand rapidly. To encourage more cloud usage, we expect a number of measures from the government and business sector. However, this growth will also bring new obstacles.
In 2024, we should anticipate more surprises based on the patterns of the last several years. These are the five themes that Cloud will most significantly affect the financial services industry in the upcoming year, if your organization is a financial institution or has strong relations to the sector.
1. Cloud industry
In recent years, the idea of an industrial cloud has become more popular. At first, companies primarily paid attention to utilizing the cloud to store unimportant work. Consequently, the proportion of their workloads housed on public clouds has decreased to 20%, and industry-specific or industry-relevant features are receiving less attention.
Cloud industry
AWS, Microsoft, and Google Cloud—the top three public cloud service providers globally—all provide in-house cloud solutions. For instance, Amazon FinSpace is made to handle and evaluate financial data in accordance with legal specifications. In order to boost client loyalty and lifetime value, Microsoft Cloud for Financial Services offers financial services data management and a unified view of the customer. Retail banks can use Open Banking for regulatory reporting and customer administration while using Google Cloud’s API management platform.
2. Explainable AI
The utilization of data for training along with features and weights for prediction and decision-making is known as explainable AI. We will even have AI by 2023 that can translate AI operations for people.
In 2023, we should anticipate further upskilling measures to address this. Furthermore, a rise in explainable AI that is cloud-native and includes tools, dashboards, and processes Control makes it possible for consumers, regulators, and internal stakeholders to comprehend and have faith in the results of machine learning algorithms.
3. Regulations in code form
According to an IBM report, the largest barriers to financial services’ digital transformation are legislation and compliance. Businesses want more creativity and agility, but there’s a chance that they won’t set up cloud resources correctly.
Regulations in code form
The rationale behind this is that while compliance testing is usually done relatively occasionally, cloud resources are continuously being developed and improved. Disconnection between the two parties could result from this, which could lead to data drift and non-compliance with regulations in between audits.
A programmatic technique known as “Compliance as Code” transforms policies on human-readable documents into automated, machine-readable procedures. It consists of a collection of instruments and techniques that let cloud resource configuration be done by risk and compliance stakeholders, guaranteeing that compliance regulations are followed and offering comfort.
4. Cloud developer program
Financial services has a hard time finding tech expertise, despite the industry’s reliance on technology. Consequently, financial services companies have encountered difficulties in acquiring the necessary personnel to improve customer experiences and optimize internal procedures that impede their efforts towards digital transformation.
5. Green finance
Frequently, the mention of Environmental, Social, and Governance (ESG) issues in trend pieces is not so much a signal of imminent change as it is symbolic. Nonetheless, the energy crisis will undoubtedly elevate ESG to the top of the strategic priority list.
Proposals for “green finance” have languished for a while. On the other hand, an era of green finance will be ushered in by new cloud-native technologies, bringing a plethora of fresh products to the market. These include carbon-neutral farms, solar panels, energy-efficient loans, green mortgages, finance for electric vehicles, and other environmentally friendly goods that meet ESG requirements
All things considered, the financial services sector’s digital transformation will proceed in 2023 in an effort to lower expenses, boost income, and improve internal operations efficiency. Businesses will be able to take advantage of cloud-native technologies and underdeveloped market segments by providing creative services like green finance thanks to cloud technology. Furthermore, more people will be able to access and benefit from its financial services and underlying technology thanks to its regulatory compliance, use of explanatory AI, and cloud developer program.
