The advent of cloud-native architecture is reshaping the landscape of financial services. As institutions transition from the traditional “lift and shift” model to building applications natively in the cloud, companies like AWS are at the forefront of this transformation. AWS provides a platform that enables banks to streamline operations and optimize data for improved decision-making. This development marks a shift in priorities within the financial sector, where cloud infrastructure now plays a crucial role in enhancing operational efficiency and gaining a competitive edge.
Previously, the “lift and shift” approach was primarily about migrating existing applications to the cloud for scalability. However, the financial sector increasingly recognizes the benefits of cloud-native design, such as microservices and serverless computing, that offer enhanced flexibility and efficiency. Institutions are now focusing on extracting value from data, using cloud capabilities to better manage risk and personalize customer experiences. A decade ago, discussions around cloud adoption centered on savings and efficiency, but today, innovation and data insights drive the conversation.
What does cloud-native bring to financial institutions?
By employing cloud-native architecture, financial organizations can drastically reduce time-to-market and enhance their decision-making processes. AWS implements a “shared responsibility” model, where the company secures the infrastructure while clients manage application-level controls.
“It starts with data,” remarked Nilesh Dusane, AWS’s global head of Institutional Payments.
This approach not only bolsters security but also facilitates real-time data processing, crucial for risk management and fraud detection.
How is the financial ecosystem evolving with new regulations?
The adoption of standards like ISO 20022 and regulatory frameworks such as open banking have necessitated the evolution of payment systems. AWS assists institutions in becoming compliant while leveraging newfound data transparency for added services.
“What cloud, what financial institutions can do … is first go live or upgrade their payment systems to support ISO 20022 standards,” Dusane noted.
Such compliance allows banks and fintech companies to develop innovative offerings using structured data.
Generative AI enhances the value of cloud-native designs by providing institutions with tools for increased productivity and risk management. Automation and personalized experiences are now achievable at scale, enabled by AI technology married with cloud solutions. For instance, AWS supports institutions in creating hyper-personalized customer interactions, challenging the traditional personalized approaches that were limited in scale.
Organizations must contend with the complexity of offering real-time, cross-border payments. Platforms like Wise, Remitly, and Convera demonstrate effective use of AWS’s cloud infrastructure to facilitate instant payments, encompassing a multirail strategy to bridge global transactions. Such capabilities underscore the shift towards embedded, instantaneous financial solutions.
The progression from viewing the cloud as an endpoint to treating it as an enabler marks a significant transition. AWS continues to innovate by expanding its offerings to support agentic AI, fostering new use cases and experiences within the financial landscape. This commitment suggests a long-term focus on employing technology to meet diverse client needs and exploring further advancements in AI.
Cloud-native architecture provides financial institutions with tools to improve efficiency. New regulations like ISO 20022 and open banking drive innovation. Leveraging generative AI, companies broaden their capabilities in a global financial context.
