Garnet Capital Advisors Blog

The cloud is rampant across most industries, but are banks ready to fully embrace it?

It's no secret that banks across the country have been somewhat slow to adopt technology in their banking platforms. But perhaps the cloud will change all that.

Banks have traditionally been quite conservative in the way they do business and aren't exactly the first to jump at change. This is especially true when it comes to modifications that will basically change the way they have been conducting business for decades.

In many cases, banks still need to decide which core functions should be created and operated internally. Many bank services use certain technology or provide features that are more expensive to maintain and are slowing down change.

Perhaps a shortfall in knowledge and experience about emerging technologies act as obstructions when it comes to embracing innovations like the cloud. Not only that, but many banks continue to fear the vulnerability of pertinent financial information being put out there in the cloud.

But with the cloud increasing by over 71 percent across all industries in 2015, there's something more than just a trend happening here. And banks should seriously consider implementing such innovative technologies in order to keep their competitive edge, especially among sprouting fintech companies.

Despite much apprehension, banks are starting to show some support for cloud computing implementation. Cloud-based apps are just one of the ways in which they are starting to perk up and hop aboard the digital technology train.

In fact, 46 percent of banks are already using the cloud for application development, according to a recent study from Cloud Security Alliance.

Capital One is already blazing a trail when it comes to mobile banking apps taking to the cloud. Other US banks - including Goldman Sachs and JPMorgan Chase - are following suit.


Capital One is among the leaders in the financial industries to adopt the cloud for its banking apps.

Aside from keeping up with the fintech competition, there are other benefits to implementing the cloud into mobile banking apps, including saving money and being better able to handle peak banking volumes.

Banks that are ratifying 'cloud containers' are making it easier for their developers to quickly and easily shift apps between cloud computing environments, thereby simplifying the app development process for different operating systems. A mobile application can be hosted by one provider, then later reassigned to another.

Of course, there's always the issue of security, especially when it comes to newer technology like mobile apps and the cloud. But banks like Capital One are taking steps to ensure their cybersecurity is up to the task of protecting sensitive financial information that clients entrust in the cloud.

In proper conservative banking fashion, banks are taking things slow when it comes to adopting cloud computing for their applications. Banks are testing out one application at a time in the cloud, while still retaining traditional core banking software which will likely stay more in the background as cloud computing becomes more prevalent and embraced.

Taking things one step at a time will allow banks to have more time to test out the compliance rules and security needs that come with cloud territory. This is of particular importance to smaller-scale community banks that don't necessarily have the resources that their larger financial counterparts have. Carefully weighing out risk and reward is the way for these banks to go.

Garnet Capital - Supporting Banks of All Sizes Through the Adoption of Technological Change

Cloud-based applications are just one way that digital technology is changing the face of the banking industry. And while banks continue to embrace and implement such technologies, Garnet Capital is right there to back them up.

Savvy banks understand the importance of staying relevant during these changing times and are adopting the applicable technologies that their competitors have already put into action.

At Garnet Capital, we fully grasp the importance and necessity of how technology changes loan portfolios, and understand how tough it can be for banks during the transition phase. But with our far-reaching expertise in offering valuation guidance to institutions in the financial industry, we've developed strategies to help these entities reinforce their positions in this realm, and stay competitive in the midst of dramatic change.

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