Cloud Computing in Banking Industry

Discuss about the Cloud Computing in Banking Industry.

Banking industry is one of the key industries for every country and the same has witnessed a number of major changes in the past few years. There has been a shift from the traditional and paper based banking services to the faster automated solutions with the aid of technology and digital innovation. Cloud computing is one of the significant technologies that is involved behind the transformation of banking services. Cloud computing is a technology or a concept that allows the services to take place over the network which is mostly the Internet. This technology has enabled the banking services to have quicker and faster operations along with the ease of data management. It delivers a new model to provide the banking services over cloud so that the users from all across the globe find it easy to use the services from any of the location. The new and improved demands of the users from the banking services and operations can be easily met with the help of the cloud. There are also a number of advantages that are offered to the banking industry in terms of cost savings and customer satisfaction (Ghule, Chikhale and Parmar, 2014).

The report covers the impact of cloud computing on the banking industry across the globe and various examples in terms of organizations that have been positively impacted from the same have been cited in the report. There are also a number of challenges that need to be smartly tackled in the implementation of cloud services to the banking industry which have also been covered in the report. The future prospects of the technology as per the market research and analysis results have been highlighted along with the major risks that are associated in the path.

Business Technology

Impact of Cloud Computing in Banking Industry

  • Costs and Profits: Cloud computing allows the banks to have cost effective solutions without the requirement of dedicated environment to implement the same. Earlier it was necessary to have the infrastructure to incorporate the various requirements to carry out the operations in terms of man and machine. With the introduction of cloud computing techniques in the world of banking, there are solutions that are made available to the customers over the cloud, data management and storage is also done on the cloud and thus the team needs to create, monitor and maintain the same without the need of a huge list of hardware and other essentials. It results in cost savings for the banks and also increases the profits as the services are made available and managed in an easier manner.
  • Organizational Growth in the Market: Scalability and flexibility are the two prime elements of any of the cloud service. Market and technology keeps on changing at a rapid pace and the same requires the banks to implement and adapt the changes. It was earlier not possible to quickly come up to the terms with the changing environment and required a huge amount of re-work and modifications to the existing infrastructure as well. However, cloud computing allows the organization to scale up or scale down as per the market demands and technological changes without affecting the additional architecture. The response time is also extremely quick which allows faster growth of the organization by building up a reputed name in the market (Niazmand, 2016). 
  • Organization functions and resources: There are a number of operations that are performed by a single unit in the banking industry. The process that was followed earlier comprised of a number of different complex procedures and the integration of all of them was a major challenge for the resources. With the addition of the cloud computing techniques, it is possible for the banks to streamline all of the activities and the integration is also extremely easy to perform. The same results in increase in the efficiency and productivity of the resources along with the excellence in the operations that are carried out (NEDELCU, 2016).
  • Customer Relationships and Satisfaction: Cloud computing technologies also allow the betterment of the customer engagement and relationships with the business end of the operations. It allows the customers to be actively involved with the activities and also allows them to easily interact with the business executives and representatives. There is also an extreme level of transparency that is kept between the providers and the consumers. The services that are provided by the banks with the help of cloud computing also allow the fulfillment of the customer demands in timely manner. The latest services and operations are provided at low cost and at a faster and always available basis. The same results in better customer satisfaction and allows the banks to ensure a huge customer base. There is also a huge level of personalization and customization that has been added to the operations and services that are provided that adds up to the customer satisfaction level (, 2013).
  • Global Reach: The banks that were set up earlier were confined to a particular community or area and were expanded to one particular city at the most. The primary reason behind the same was the inability to reach more number of customers due to geographical boundaries. However, the same has been overcome by the cloud computing technology in the banking sector as it allows the banks to offer their services to the local, national and international users. Cloud does not rely on the geographical location of the customer and allows him or her to perform an operation irrespective of the location. The accessibility along with the availability of the service is non-stop and unaffected by the location as well. The ability to achieve the same allows the banks to represent themselves on a global platform rather than being restricted to a confined area or location (Groenfeldt, 2016). 

Commonwealth Bank of Australia – Organizational Advantages with Cloud Computing

Commonwealth Bank of Australia (CBA) is the known name in the banking industry and has its headquarters in Sydney, Australia. The management unit of CBA decided to incorporate the cloud computing platform and services in their architecture and performed the same in the period of 2006 to 2014. There are a number of positive impacts that the bank has experiences upon the migration to cloud and the same has been discussed below.

Return on Investment (ROI)

There was a significant improvement in the ROI that was received by CBA with the addition of cloud services and platform in its architecture. The market demands were addressed quickly and the cost that was spent by the bank during the migration procedure was much lower than the profit that the bank experienced in return. The pricing model that was followed in the cloud architecture was the pay-as-you-go (, 2016).

Competitive Advantage

Cloud services enabled CBA to have full contestability over the time and allowed it to emerge ahead of the competitors in the market. It is because of the flexibility and scalability of the services that were offered to the customers that made the entire journey and the results extremely fruitful. Business sector and innovation continues changing at a fast pace and the same requires the banks to execute and adjust the progressions. It was before impractical to rapidly come up to the terms with the changing environment and required an enormous measure of re-work and alterations to the current framework too. Be that as it may, cloud computing permitted CBA to scale up or downsize according to the business sector requests and mechanical changes without influencing the extra design. The reaction time is likewise to a great degree snappy which permits speedier development of the association by working up a rumored name in the business sector. All of these reasons and achievements allowed CBA a huge competitor advantage (, 2016).

Customer Convenience and Supplier/Customer Demands

Cloud figuring innovations likewise permitted the improvement of the client engagement and associations with the business end of the CBA. It permitted the clients to be effectively required with the exercises furthermore permitted them to effortlessly collaborate with the business administrators and agents. There is additionally a compelling level of straightforwardness that is kept between the suppliers and the purchasers. The most recent administrations and operations are given requiring little to no effort and at a speedier and constantly accessible premise. The same results in better consumer loyalty and permits CBA to guarantee an enormous client base. There is likewise an enormous level of personalization and customization that has been added to the operations and administrations that are given that indicates the consumer loyalty level (, 2016).

Operations Streamlining

There are various operations that are performed by a solitary unit in the saving money industry. The procedure that was taken after before contained various distinctive complex techniques and the incorporation of every one of them was a noteworthy test for the assets. With the expansion of the cloud registering procedures, it is feasible for CBA to streamline the majority of the exercises and the reconciliation is additionally greatly simple to perform. The same results in expansion in the proficiency and efficiency of the assets alongside the perfection in the operations that are completed (, 2016).

Challenges of Cloud Computing for the Banking Industry 

There are a number of challenges that are present in front of the organizations to implement and adapt the cloud computing technologies in their environment. The same are listed and discussed below.

Security and Regulatory Compliance

Security is one of the major challenges that appear before the organizations while implementing and adapting the cloud technologies. There are broadly three cloud models as public, private and hybrid. The data and information security risks in the public cloud model are huge which are further minimized in the private cloud model. These risks can be extremely fatal in nature as they may affect the confidentiality, integrity and availability for the information that is associated with the banks. Any compromise o the banking information results in legal and regulatory obligations which is extremely challenging for the organizations to deal with (DISYS, 2016). The security risks that are associated with the cloud are:

  1. There are a number of malware threats and risks that are potential and probable to the cloud environment. Many new malware are being constantly developed which may have low to severe impact on the cloud service. These malware include the viruses, worms, logic bombs and Trojan horses.
  2. There are also many network threats that are possible in the cloud environment such as man in the middle attack, sniffing, denial of service attacks and many others
  • Data breaches and data loss is another major concern in the cloud environment for the banks which may cause serious impact to all the essential properties of the information that is associated with the same.
  1. Account hijacking, SQL injection and application vulnerabilities are common in case of the cloud architecture which may break the system security and gain unauthorized access to the information. The acquired information can then be easily misused by the attacker.
  • Security policies of cloud service providers

There are a number of cost effective solutions that are provided and enabled with the help of the public cloud architecture. These solutions allow the banks to have the latest technology implemented but the same is weak on the aspects of the security parameters as pointed out in the first point. It makes the organization move only the non-core and non-critical services to the public cloud and the decision on the same is also huge in nature (Choo, 2016).

Cost Considerations

The major solution to the security problems of public cloud are easily addressed with the help of the private cloud. However, the same has its own set of challenges. The prime challenge in the migration of services to the private cloud is in terms of the cost that is associated with the same. There is a great degree of customization and automation that is necessary with the private cloud that demands good investment and heavy expenses. These cost considerations can be very challenging for the banks and financial institutions (Gavri, 2016).

Technical Limitations

Although there is no advanced infrastructure that is necessary to implement the cloud services, there can be many technical challenges that may appear in front of the organizations while implementing the applications. There are many applications that demand niche software packages or capability driven architecture which is technically troublesome to implement on the cloud. Such scenario may be challenging for the organizations to deal with as they often demand an alternative for the issue to be effectively addressed (Choo, 2016). 

Future Prospects for Cloud Computing in Banking Sector

Cloud computing in the banking industry is here to stay for many more years in the future. However, there are many changes and modifications that will be done in the upcoming years to utilize the complete benefit of the same. There are still many banking institutions that rely on the public cloud for providing the services. The public model is not accurate for this industry as it deals with confidential information. The future will see a lot of migration from public to the private cloud. Private clouds have developed themselves as the most loved entity of the management for an accounting industry. Additionally, in light of the fact that in a monetary domain where applications are basic and represented by stringent client industry consistence, they can give high security. They guarantee that no information is lost or lost furthermore give the adaptability of control so as to adjust asset design as per interest. Since private clouds are sent inside an association’s firewall, the risk of security breaks is deterred. The organization’s IT foundation can be moved onto a solitary private system utilizing a virtual private system. The benefits of private cloud will also allow the banking organizations to be more flexible and agile (Arora, 2016). There will also be changes in other security mechanisms that are currently used in the banking industry in terms of dealing with the security risks of the cloud. The newer methods will include the multi-layer authentication systems, better access management, advanced intrusion detection systems, One Time Passwords (OTPs) and many more.

Reporting is one area in the banking industry which is not benefitted fully with the advantages that are offered by cloud computing. There are a number of databases that can be utilized for the reporting activities as well and are made available on the cloud. The major addition in the list is a number of NoSQL databases that have specifically been designed for the Big Data and cloud computing services. These come at low cost and have hassle free installation and can be easily utilized for the reporting activities such as scheduling, automatic alerts, customized reports, graphical representations in the reports and many other advanced features.

Out of all the advantages of cloud computing for the banking industry that have been discussed in the report, customer satisfaction and global reach are the two prime factors that have had a huge impact on the industry. Cloud computing technology allows the banking industry and its services to be available for the users on the non-stop basis. It is possible to carry the services on the go through the accessibility on the mobile platforms as well. With the easy accessibility and non-stop availability, there is also a great degree of flexibility and easy interactions which allow huge customer satisfaction. These two advantages have positively impacted the banking industry as the profits have increased and the customer base that is set up has also allowed the banks across the globe to function in an excellent manner.


Banking industry is one industry that is an integral part of every community and country. It is necessary for the banks to provide the latest features as per the changing technology and reflect the same in the software and solutions that they provide. Everything is automated in the present world and the customer requirements also include flexibility, scalability, faster response time and easier navigation in their list of demands. Cloud computing is a technology that has eased the operations and services that are provided by the banking industry. The various models and platforms of cloud have allowed the services such as tax processing, accounting, bookkeeping, auditing, credit management and many other activities to be extremely easy to offer. Cloud computing has also resulted in a number of major improvements and advantages for the banks in terms of the customer satisfaction, global reach, return on investment, organizational growth and many others. There are a few challenges and issues that are present in the implementation of the cloud computing technologies in the banking industry. The primary risks that are present are in terms of the security, cost considerations and technical factors that may appear as hindrances in the cloud architecture for banking institutions. These challenges can be overcome with the help of proper planning and management along with the creation and implementation of the improved security mechanism. There are also technical tools that are available to resolve the technical issues that are associated with the cloud. 

Cloud computing and the technologies that are offered by the same have proved to be a huge success for the banking industry as it has transformed the services and operations performed under the same in a positive manner. There are also predictions on the basis of the market analysis and research that says that cloud computing will remain an essential element in the banking industry for many years to come. There will be innovations and modifications that will be done in the same in terms of the cloud model, platform and security activities. These modifications will allow the amalgamation of cloud computing and banking industry in a better manner (Niazmand, 2016). 


Arora, P. (2016). Banking on the cloud. [online] Cisco. Available at: [Accessed 29 Aug. 2016].

Choo, K. (2016). Cloud computing: Challenges and future directions. [online] Available at: [Accessed 29 Aug. 2016].

DISYS, (2016). Cloud challenges of the financial sector. [online] DISYS – IT Staffing and Services. Available at: [Accessed 29 Aug. 2016].

Gavri, A. (2016). Private Cloud Adoption: Approach, Benefits, and Challenges. [online] Available at: [Accessed 29 Aug. 2016].

Ghule, S., Chikhale, R. and Parmar, K. (2014). Cloud Computing in Banking Services. [online] Available at: [Accessed 29 Aug. 2016].

Groenfeldt, T. (2016). Forbes Welcome. [online] Available at: [Accessed 29 Aug. 2016]., (2016). How Commonwealth Bank of Australia Gained Benefits Using a StandardsBased, Multi-Provider Cloud Model. [online] Available at: [Accessed 29 Aug. 2016].

NEDELCU, B. (2016). Cloud Computing and its Challenges and Benefits in the Bank System. [online] Available at: [Accessed 29 Aug. 2016].

Niazmand, N. (2016). The impact of Cloud Computing in the banking industry resources. [online] Available at: [Accessed 29 Aug. 2016]., (2013). THE BENEFITS OF CLOUD COMPUTING FOR THE BANKING & FINANCIAL INDUSTRY. [online] Global Banking And Finance Review Magazine – Financial & Business Insights. Available at: [Accessed 29 Aug. 2016]. is known for providing well-regarded coursework writing services that exactly meet the students’ needs. Our each assignment is customized as per the provided guidelines and maintains originality involving latest information on the researched topic. Hence, students receive 100% plagiarism-free top-quality well-structured coursework help solutions from us. In addition, we offer 24×7 live support to ensure that students get uninterrupted coursework writing help when they need it most.

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