ABA Banking Journal
No Result
View All Result
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive
SUBSCRIBE
ABA Banking Journal
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive
No Result
View All Result
No Result
View All Result
ADVERTISEMENT
Home Retail and Marketing

Cloud Technology: Permanent Climate Shift?

April 1, 2015
Reading Time: 4 mins read

ABA's "Excellence in Advocacy" honorees are going above and beyond to get out the message of the banking industry.

By Rich Weissman

The buzz is that the cloud will help level the playing field for community and regional banks. But is this simply overhyped fog? Here’s what you need to know.

What will the future of banking look like in the decades ahead? How will things change, and what new methods will we be using to manage our banks? These are important questions that every bank management team should be asking, as we try to understand and plan for the next significant industry trend.

A leading trend is the growing use of cloud technology. It is already important and will become central to how we operate in the coming decades. Understanding and effectively using cloud technology will be key to ensuring future bank performance.

It’s not about the hottest new gizmo. No, cloud technology is not a flash in the pan. It is a serious new business methodology that is changing industries—including ours—globally. Embracing cloud technology, and not fearing it, will be important in bringing about a bright future for banking.

First, it’s important to clarify what the term cloud technology means. Cloud technology is the use of external providers that, through the Internet, deliver networked computer database processing and modeling services. Data for cloud technology is sourced from a multitude of databases. The processing and modeling occur outside of the bank’s internal information technology (IT), even though data can be sourced from internal data files. Cloud technology allows for multiple users within the bank to access information through external providers. These external providers can deliver the information in far more efficient and expansive ways than otherwise would occur if the bank were dependent on its own internal resources.

Cloud technology expands the world of the bank’s IT infrastructure well beyond its internal capacities and expertise. Cloud technology allows the bank to significantly add capabilities and competencies without commensurate infrastructure and human resources expenses. It moves the burden from internal resources constraints to external solutions.

Complex analytic tools

Why is cloud technology now getting so much attention? It’s simple. Banks are coming to the understanding that they must harness the data within their systems, and most banks do not have the internal resources to develop, house, process and provide access tools for its bankers in a way that meets today’s sophistication requirements for many different types of database applications. From a hardware and software perspective, and most importantly from the perspective of being able to access expertise and highly complex computing models, most banks simply cannot keep pace internally with their ever-growing information needs. Moreover, increasingly complex regulatory requirements necessitate increasingly higher levels of expertise.

Driven by competition, banks are searching for novel ways to manage these pressures. Since analytic tools and artificial intelligence models have become too complex in today’s “big data” world, and most banks cannot expect their IT staff to keep up and to provide the level of service given these complexities, new methods are needed. One cannot expect most banks to staff IT divisions with data mining scientists, mathematicians, statisticians and multidisciplinary specialists with expertise in database technologies across a wide variety of disciplines in various technology areas. It simply is not possible. By using cloud technology providers, and accessing their services through the Internet, a new world of state-of-the-art technology solutions become available. Cloud technology takes the stress off the bank and allows external solutions to fill in the gaps.

Here’s a simple analogy: Just as hospitals cannot internally produce their own magnetic resonance imaging (MRI) machinery or other highly advanced medical equipment, banks cannot internally produce their own big data systems, and they cannot manage or process them in an effective way. Things have gotten too complex. That is where cloud technology comes into play—turning to experts who can perform these critical functions through the Internet outside of the bank.

As a start, cloud technology works with massive amounts of data, including huge amounts of data over time. Because of its functionality, cloud technology can be used as a vital data warehouse and also act as a backup data recovery system. But more importantly, cloud technology is more than just a vehicle to access massive amounts of data. At its heart, cloud technology is about taking data and transforming it into intelligence through highly detailed modeling methods. By creating a data-mining capability through cloud technology, the bank adds value by acquiring artificial intelligence. Cloud technology should help the bank “connect the dots” in ways in which the bank would not otherwise have the capacity to do.

There are many types of cloud technology applications in banking. These include analytics and modeling for:

–Profitability assessment.

–Risk management.

–Customer behavior management.

–Process management.

–Sales management.

–Predictive analytics.

There are many advantages of cloud technology. These include:

ADVERTISEMENT

–Cloud technology levels the playing field for smaller banks, in that banks of all sizes can access highly sophisticated analytic tools without the internal staff or resources that would normally be necessary to support such an enormous effort. It allows smaller banks to compete more effectively with all size competitors.

–Cloud technology changes the nature of the bank’s IT. Instead of being a division that internally produces and executes technology, the IT department becomes one that manages technology and outside resources. This shift raises the level of IT from tactical implementation to strategic management. Cloud technology allows the bank to engage in far more IT initiatives with many more providers and different tools than otherwise would be possible.

–Cloud technology adds to efficiency and productivity as it releases costs and capital from IT development and support to other areas of the bank.

–Cloud technology allows the bank to remain relevant. It keeps the bank current and gives its people tools that reflect how business operates today and into the future.

Certainly, the business of banking is changing rapidly, and new technologies are emerging at a rapid pace. Banks must keep up but must understand that the future is about partnerships, expertise and capacities. This approach requires moving from the old way of building and serving internally to a new approach of using cloud technology and the Internet as a solution.

For banks of all sizes, cloud technology is now front and center and no longer pie-in-the-sky. It is available and usable for banks today to allow for highly sophisticated and innovative analytic tools. These tools enable banks to remain relevant, competitive, successful and prosperous as they enter the next era.

Rich Weissman is the president and CEO of DMA, a national systems and service provider to banks and credit unions. The company provides management, profitability, marketing, and sales support. Email: [email protected].

Online training in digital, mobile and social media from ABA.

 

Tags: Cloud migrationTechnology
ShareTweetPin

Related Posts

Is deepfake technology shifting the gold standard of authentication?

Will fraud prevention ever be autonomous?

Technology
June 17, 2025

Anti-fraud systems are learning to anticipate fraud rather than merely react to it. Better anticipatory abilities inch systems closer to full automation.

Podcast: Old National’s Jim Ryan on the things that really matter

Podcast: Old National’s Jim Ryan on the things that really matter

ABA Banking Journal Podcast
June 12, 2025

Jim Ryan has led Old National Bank to 250% asset growth. On the podcast, the ABA American Bankers Council chair discusses the bank's growing profile and footprint, his views on deposit insurance reform and the experience of leading...

Bank community engagement: Yes, you can help bank veterans

Bank community engagement: Yes, you can help bank veterans

Retail and Marketing
June 9, 2025

AMBA partners with the ABA Foundation to recruit banks to provide our nation’s veterans access to safe, reliable and flexible financial products and services.

FHFA finalizes strategic plan for 2022-2026

Marketing Money Podcast: Why leadership matters more than likes

Retail and Marketing
June 6, 2025

For bank marketers, the value of being strategic is great.

Looking for trouble?

Podcast: What bankers need to know about ‘First Amendment audits’

ABA Banking Journal Podcast
June 5, 2025

"First Amendment auditors" have long tried to provoke public officials into stopping them from recording in public settings. Now, some auditors are targeting banks.

ABA: Proposed quality control rule for AVMs would overburden banks

Bank survey: Uncertainty weighing on prospective homebuyers

Community Banking
June 4, 2025

Roughly 60% of current homeowners and prospective homebuyers are uncertain whether now is a good time to buy a home, up from 48% two years ago, according to a recent survey by Bank of America.

NEWSBYTES

Stablecoin bill clears Senate

June 17, 2025

CFPB to delay small-business lending data collection compliance dates

June 17, 2025

Senate tax measure contains provisions on ACRE, pass-through business deduction

June 17, 2025

SPONSORED CONTENT

AI Compliance and Regulation: What Financial Institutions Need to Know

Unlocking Deposit Growth: How Financial Institutions Can Activate Data for Precision Cross-Sell

June 1, 2025
Choosing the Right Account Opening Platform: 10 Key Considerations for Long-Term Success

Choosing the Right Account Opening Platform: 10 Key Considerations for Long-Term Success

April 25, 2025
Outsourcing: Getting to Go/No-Go

Outsourcing: Getting to Go/No-Go

April 5, 2025
Six Payments Trends Driving the Future of Transactions

Six Payments Trends Driving the Future of Transactions

March 15, 2025

PODCASTS

Podcast: Old National’s Jim Ryan on the things that really matter

June 12, 2025

Podcast: What bankers need to know about ‘First Amendment audits’

June 5, 2025

Podcast: Accelerating banking for quick-service restaurants

May 8, 2025
ADVERTISEMENT

American Bankers Association
1333 New Hampshire Ave NW
Washington, DC 20036
1-800-BANKERS (800-226-5377)
www.aba.com
About ABA
Privacy Policy
Contact ABA

ABA Banking Journal
About ABA Banking Journal
Media Kit
Advertising
Subscribe

© 2025 American Bankers Association. All rights reserved.

No Result
View All Result
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive

© 2025 American Bankers Association. All rights reserved.