How the cloud service economy and vertical SaaS is opening up huge benefits for banks
Regulatory and security burdens are no longer the barriers to cloud adoption that they used to be for the financial sector – and vertical software as a service (SaaS) is now making the leap a true no-brainer.
The digital economy has created so many opportunities. So much has changed in such a short period of time; just five years ago, the notion of cloud services being used in business would have been an utterly alien concept. Now, it’s well on the way to gaining acceptance across even the traditionally slowest adopting sectors, but much work still has to be done.
For too long, banks have lagged behind in terms of SaaS adoption. While the SaaS model has been widely used for horizontal consumer applications, it has not had the same uptake across financial services - understandably in many instances.
Several factors have served to hinder uptake of SaaS in the banking space, least of all the relative scarcity of banking-specific SaaS on offer. Vendors have had to meet a complex array of requirements from banks, including the effective control, management, audit, and securing of all information flows, while ensuring compliance with a complex array of regulatory requirements – no mean feat. That’s where on-premises applications have appeared more attractive in the short-term as financial institutions have been more comfortable having application providers defined within their firewall.
Yet, by failing to maximise the benefits of the cloud, institutions really are now missing out on a lot. SaaS is evolving in the cloud, and is increasingly closing the gap on how to meet those unique requirements through automation and data consolidation.
Indeed, the scalability of SaaS is massive, having been designed with adaptability inherently in mind. It is also highly resilient , evolving constantly, and providing immediately realised value. Indeed, the cost of ownership is usually significantly lower than other delivery models.
However, the real game-changer has now arrived, heralding the dawn of the cloud service economy in earnest.
‘Vertical SaaS’ offers the same level of control, integration, transparency, and security as that offered by Application Service Providers and, most importantly, can live within an institution’s firewall. Vertical SaaS is fundamentally able to combine the security benefits of the ASP delivery model with the cost benefits of the SaaS model for a true win-win situation.
Vertical SaaS is thus providing a highly viable model and addressing financial sector concerns in new ways – and financial institutions can still take a lead.
Primarily, the vendor solution is able to integrate well with the operating and control environment of the bank, while providing fast and accurate financial reporting which, in turn, allows for better, more informed decision-making.
Vertical SaaS is also offsetting concerns by better understanding data governance procedures and actively meeting requirements by including compliance capabilities, thus ensuring transparency and agility for ever-evolving demands. This further means that operating procedures and infrastructure are audited by an independent third party, providing further peace-of-mind.
With the introduction of, and marked on-going investment in, the more robust model that is vertical SaaS, the reasons for financial institutions to avoid making the adoption leap are becoming fewer and fewer. The hard work has already been done. It’s now quicker, more secure, more agile, and ultimately better – so there really is no barrier left to stop banks from adopting and realising the huge benefits.
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