Mt Helen Campus

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School of Science, Information Technology and Engineering

Student ID: 30131831 Student Name: SRAVAN KUMAR EAGA

Course Code: ITECH3214/6214 Course Name: EMERGING TECHNOLOGIES OF BUSINESS

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TEAM ASSIGNMENT--- REPORT & PRESENTATION

FOCUS ON EMERGING TECHNOLOGIES IN BANKING INDUSTRY

INTRODUCTION OF THE INDUSTRY:

Banking industry and financial institutions nowadays facing rapid change. Customer behaviour, retention, technology, regulatory compliance and competition from existed competitors and quick and innovative upcoming competitors are all in flow.

Satisfying customer is the main key to address those issues. These customers expecting from banks to simplify their individual needs

without incurring price premium. Banks must act now to engage their customers to build better customer

relationship management (CRM) and loyalty. Financial services firms like banks must concern about client information

security and expected to enter the cloud computing arena cautiously, with no single cloud services delivery model for best meeting their demanding business needs.

GENERAL OVERVIEW OF THE TECHNOLOGY:

1) DEFINITION:

Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.”(Reference U.S. based national institute of standards and technology)

“It’s one of the foundations of the next generation of computing. It’s a world where the network is the platform for all computing, where everything we think of as a computer today is just a device that connects to the big computer we’re building. Cloud computing is a great way to think about how we’ll deliver computing services in the Future.”—Tim O’Reilly, CEO, O’Reilly Media

2) DESCRIPTION OF TECHNOLOGY:

Cloud as a self-service, rapid capacity model in which pooled resources and services are accessed over a broad and standardized network. Financial institutions can Rapidly access and provision needed cloud and utility computing capabilities, and those services are measured to control and optimize available resources. Several cloud deployment models are

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now available to banks, insurance firms, and other financial services firms.CLOUD SERVICE LAYERS

Business as a service (BaaS) Software as a service (SaaS) Platform as a service (PaaS) Infrastructure as a service (IaaS)

ESSENTIAL CHARACTERSTICS OF CLOUD COMPUTING

On-demand self-services Broad network access Resource pooling Rapid elasticity Measured service Multi tenacity

WHY CLOUD COMPUTING FOR BANKING

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The banking industry is dependent on information of computer technology for its operations and delivering quality customer service. High technology costs for secure systems and under-utilized hardware are additional obstacles that banks commonly face. Pay-for-use cloud services can provide banks and other financial institutions opportunities to reduce costs by utilizing hardware more efficiently and can give them the ability to scale operations as needed.

cost saving business continuity business agility and focus green IT

LEVEL OF ADOPTATION

Reference http://www.capgemini.com/resource-file-access/resource/pdf/Cloud_Computing_in_Banking.pdf )

Organizational advantages of cloud computing in banking industry Page 3

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RETURN ON INVESTMENT:

Banks are looking for a need to do with less. more strict regulatory capital requirements leave less money to invest for financial gain. some banks trying to invest on traditional business models and looking for new revenue producing possibilities that cloud computing can offer.

When it comes to think about ROI in banking, Agility by using of cloud services comes via the ability to move quickly into new markets, adapt core business processes around new business opportunities in a timely manner, and/or grow financial services companies through acquisition.

Cloud services adopted by financial services like banks (ex.commonwelath bank,HDFC)has saved millions of dollars over the past five years.

This also contributed to these banks spent three times less on IT infrastructure.

These banks used to consume about 75% their IT budget on infrastructure.it is now slashed to 26%.

So these profits channels to others areas such as implementing new products and facing new customer technologies.

For example commonwealth bank spends $1.6 billion on IT, and it slashed to $86 million dollars.

As per the surveys cloud services market will reach revenues of $66 billion in 2016, with annual growth rate of almost 30%.CUSTOMER CONVENIENCE

Banks view technology and innovation as key strategic priorities. they are very conscious about customer needs and they used to keep accessing with customers by asking their needs and preferences to develop technically.

With cloud computing technology it became easy to the customers access from anywhere at any time. it gives customers and banks minimizing risk and time consuming.

Banks working to deliver an improved technical experience , data security surety, and financial decisions.

Commonwealth bank is the top one bank in the Australia. This bank adopted cloud computing technology to serve better to the customer with so many new technical products ex. commbank App,online banking, mobile banking, EFTPOS (electronic fund transfer at point of sale) etc.,

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As per the roy Morgan research MFI from 2009-2013 commonwealth bank recorded.in 2009 it was recorded 73%, for every year gradually increasing and in 5 years it reached 83% in customer satisfaction.COMPETITIVE ADVANTAGE

Researchers explains that involving more than 800 cloud decision makers and users – shows that cloud can deliver far more than just efficiency. Pacesetting organizations are using cloud to gain competitive advantage – through strategic business reinvention, better decisions and deeper collaboration. And they have the business results to show for it.

The commonwealth bank has led the way in banking technology.it has great reputation as an international leader in customer-focused technology innovation.by comparing with other banks commonwealth bank has good reputation in the market.

It is challenging to competitors by providing better customer service and maintaining good relationship with customers by using the updating technology.

With cloud technology commonwealth bank reaches to the customersAnd solving their banking transactional needs rapidly. So competitors adopting this technology to reach customers easily.STREAMLINING OF OPEARATIONS:

The bank's cloud result helped position it to fabricate a solid focused standing, expand adaptability and streamline operations by cutting server provisioning times from 45 days to short of what 20 minutes, speeding advancement cycles and permitting the bank to put new peculiarities and upgrades in the hands of its clients all the more rapidly.

In many cases its very common to a system migration from one platform to another. Take the time to improve the code and database as the application moves to the cloud. Most migrations to cloud platforms will at least drive some platform-specific changes anyway. This is a common benefit for financial services firms that move to cloud computing.

CUSTOMER/SUPPLIER DEMAND

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On demand supply become easy to the organizations with the cloud computing technology. Because the technological rapid changes made the industries provide products and services to the customers on time.

FUTURE OF CLOUD IN BANKING

At the first look the advantages to financial institutions are clear: lower costs, faster reactions to competitors and regulators, and improved communication with counterparties, for seamless transaction execution.

Even though the financial services industry has been slow to embrace cloud (mainly due to security concerns), adoption is accelerating. 

Global business spending for infrastructure and services related to the cloud was $78.2bn in 2011.

This year it is expected to grow to $174.2bn, reaching $235.1bn by 2017. it is believed that over 60 percent of banks worldwide will process the majority of their transactions in the cloud by 2016.

Financial cloud is a one-size-fits-all solution.

However, vertical cloud providers (SaaS – software-as-a-service) targeting niche markets are set to grow.

By 2016, cloud will occupy more space to business leaders than to IT. In fact, cloud’s strategic importance to business leaders is double from 34 percent to 72 percent – blowing past their IT counterparts at 58 percent.

Why because It’s all about beating the competition. Researchers explains that involving more than 800 cloud decision makers

and users – shows that cloud can deliver far more than just efficiency. Pacesetting organizations are using cloud to gain competitive advantage

– through strategic business reinvention, better decisions and deeper collaboration. And they have the business results to show for it.

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PROS AND CONS:

ADVANTAGES

1) Cost efficiency2) Convenience and continuous availability3) Backup and recovery4) Environment friendly and mobility5) Resiliency and redundancy6) storage and scalability and performance7) Quick deployment and ease of integration8) Increased storage capacity9) Device diversity and location independence10) Smaller learning curve

DISADVANTAGES

1) Security and privacy and compliance2) control and reliability3) Dependency and vendor lock in4) Technical difficulties and downtime5) Limited controls and flexibility6) Increased vulnerability7) Compatibility8) Unpredictable costs

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CONCLUSION

Every technology has two shades. Despite its disadvantages and the fact that it is in an advanced stage.

Many banks have already converted to public cloud from their existing IT infrastructure.

With an internal cloud the entire operating environment is virtualized onsite in a data center from server to storage.

Cloud computing remains strong and has great potential for the future. Its user base grows constantly and more big players are attracted to it,

offering better and more fine-tuned services and solutions. We can only hope that the advantages will further grow and the

disadvantages will be mitigated, since cloud computing seems to have made IT a little bit easier. Happy cloud computing!

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