Cloud Banking: The Trending ‘Must Have’

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According to Breitgand et al. (2018) cloud computing refers to utilization of data that is stored within an external server and is normally accessed through the internet. In other words, it is a convenient network access protocol to a shared pool of configurable computing resources like servers, networks, services, applications and storage. The data contained in the cloud is released without the necessity of constant communication with a service provider. The cloud is a result of constant enhancements in various digital networks as well as computing speed over the years.

Currently, more banks around the world are using the cloud for non-critical and non-core uses like customer analytics, human resources, customer relationship management and so on. Furthermore, in 2015, the European Union carried out a survey on financial institutions within the region and found that 88 percent of then use cloud based services (Onjure et al., 2018). At the same time, the smaller banks either transferred or were in the process of transferring their core services like payments, treasury, enterprise data, retail banking and so on.

Historically, banking technology was majorly manual but after the introduction of computers the process was automated and the process became faster (Hosseinian-Far et al., 2018). With the use of computers, banks found it easier to use external networks through e-mails or the internet. As a result, mobile and internet computing increased which resulted in online banking that enabled convenience and flexibility to customers which eventually lowered costs.

Online banking has led to more competition between banks and has helped new entrants to tap into the market. As of now, banks have more products and services that have increased demands on their IT infrastructures.

Cloud computing in Kenyan Banks

In Kenya, banks seem to be shifting focus towards cloud computing. A survey carried out by Gartner in 2015 revealed that most Chief Information Officers prioritized cloud banking where 39 percent of them admitted that they wanted most of their transactions to be supported through the cloud infrastructure (Onjure et al., 2018).

Most of the services that banks offer require access to important customer information which is mainly stored in the large bank databases. This means that they have to embrace ICT so that they can be customer centric when it comes to their operations; this is in line with their growing product variety which increases their customer base and reduces operational and transactional costs through automation.

Innovation has increased competition in the Kenyan banking industry over the years and has enabled penetration of new entrants into the market and changes in regulations.

Gaining from Cloud Banking

Cloud based technologies can assist financial institutions in:

Business Continuity

Cloud based software helps financial institutions acquire a high level of data protection, disaster recovery, and fault tolerance. Furthermore, they can maintain an increased level of redundancy and back-up which will lower costs as compared to traditionally managed solutions.

Cost Savings

Cloud software services help financial institutions lower operational costs because they will not have to invest in new software and hardware. Additionally, its unique characteristics enables institutions to select services needed on the basis of pay-as-you-go.

Business Agility

Cloud based core banking allows financial institutions to shorten the development cycles for the new products. As a result, it makes meeting the banking customer’s needs faster and efficient. The fact that the cloud is available on demand means that it needs less investment on infrastructure and saves time. Therefore, new product development can be initialized without capital investment

NLS Banking solutions has recently introduced a cloud based core banking system which provides manageable technology that minimizes hardware investment and new product development costs. This makes it the most ideal component for all financial institutions.

Deployment of your core banking system into the cloud will enable your financial institution to become market focused and customer centric. Using the NLS Cloud means that your core banking operations will be highly secured, less prone to network failures, highly competitive and will not need costly infrastructure and IT resources.

According to Qiu et al. (2018), many established banks use cloud based technologies to increase their return on investment and focus on meeting the demands of the customers. Furthermore, new entrants into the banking industry use the cloud based core banking to avoid using complex IT systems. On the other hand, microfinance institutions use the cloud to speed up their delivery of economic benefits and focus more on its members and services


Breitgand, D., Da Silva, D. M., Epstein, A., Glikson, A., Hines, M. R., Ryu, K. D., & Silva, M. A. (2018). U.S. Patent No. 9,858,095. Washington, DC: U.S. Patent and Trademark Office.

Hosseinian-Far, A., Ramachandran, M., & Slack, C. L. (2018). Emerging Trends in Cloud Computing, Big Data, Fog Computing, IoT and Smart Living. In Technology for Smart Futures (pp. 29-40). Springer, Cham.

Qiu, M., Gai, K., Zhao, H., & Liu, M. (2018). Privacy‐preserving smart data storage for financial industry in cloud computing. Concurrency and Computation: Practice and Experience, 30(5), e4278.

Onjure, C. O., Wanyoike, D. M., & Mungatu, J. (2018). Influence of Capacity for Change on Electronic Commerce Strategy as Adopted by Commercial Banks in Kenya. International Journal of Innovative Research and Development, 7(1)