How cloud-based flexibility can give payment businesses the edge

By : Nav Kullar

October 09, 2018 12:00 PM

As financial services organizations hunt for vital competitive advantages in the increasingly demanding payments sector, use of cloud technology could be a key differentiator.


Deploying applications in the cloud enables the flexibility so many businesses are looking for, and the challenges involved in adopting this technology are being steadily overcome.


The cost and flexibility benefits


Unlike legacy infrastructure, the cloud gives financial institutions complete flexibility and control over the resources they dedicate to processing payments at any given time.


Traditionally, banks striving for maximum availability have had to pay for the IT infrastructure and hardware required to handle peak processing levels. In the cloud computing era, it's no longer necessary to overspend on IT capacity that is often not required.


At times when demand spikes and more payment processing power is needed – such as holiday periods and shopping events like Black Friday – cloud platforms have the agility to scale up and down as needed.


Moreover, the cloud unlocks significant cost advantages by reducing the need for financial institutions to operate their own data centers, invest in time-consuming IT updates and conduct regular hardware and software maintenance.


Flexibility also proves highly valuable when it comes to testing. The cloud gives businesses more control over how many test environments they are able to access at any one time.


Key methods such as containerization – whereby cloud-based applications are deployed in isolation for improved security and efficiency – pave the way for quicker and more reliable deployment of new product features.


This is becoming increasingly vital in the evolving payments marketplace, where customers want responsive service and new, innovative providers are leveraging the latest technologies to meet these expectations.


Overcoming the obstacles


Deploying applications in the cloud is becoming increasingly common in financial services, but many businesses have taken a long time to get onboard with this technology.


In this traditionally risk-averse industry, organizations have been held back by concerns around data privacy, the security of public cloud platforms and the ability to share information across dispersed nodes to maximize availability.


However, with cloud adoption increasing with each passing year, it's clear these challenges are being overcome and businesses' most common questions are being answered.


A recent survey by Thomson Reuters found financial firms are planning to increase their investment in the cloud from less than a third (30 percent) of IT budgets to almost half (47 percent) by 2019.


The most common concerns related not to security, but to where sensitive information is stored (24 percent), data privacy (19 percent) and losing control over data (18 percent).


Brennan Carley, global head of enterprise proposition and product for the financial and risk business at Thomson Reuters, said new rules such as the EU's General Data Protection Regulation have intensified the focus on data privacy, but "dramatic improvements" in security mean the cloud is increasingly viewed as part of the solution.


"Cloud technology is opening up new opportunities for financial firms to experiment and create value by combining data at scale with other emerging technologies such as AI and machine learning," he commented.


"Ultimately, whatever technology financial institutions use to manage data, they are responsible for ensuring robust controls are in place."


As far as the payments sector is concerned, cloud technologies are already vital for many organizations that want to achieve flexibility, control costs and deliver a positive experience for their customers.


The cloud will take on more importance as a competitive differentiator in the coming years, so businesses must ensure their payment solutions are designed to succeed in this modern industry environment.


Find out how Authentic from NCR can help financial institutions prepare for the future of payments

Nav Kullar

Payments Marketing Manager

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Nav is a marketing manager for Payments at NCR and is based in the UK. She is responsible for the marketing of NCR Payment solutions, with a specific focus on the transaction processing platform Authentic. Nav has over 15 years of experience in the payments business with previous marketing roles at Visa and Elavon.