How Cloud Banking Benefits Customers

No customer wakes up in the morning explicitly grateful that cloud banking has made paying bills or applying for a loan so simple. And yet cloud banking, a largely unsung hero, enables many of the features and conveniences that customers enjoy, such as credit scores on their banking app and fewer answers to input during onboarding. 

“The cloud is that place where you have virtually unlimited computing capacity and scalability and all of the security you want,” says Barb MacLean, head of technology operations and implementation for $3.1 billion-asset Coastal Community Bank in Everett, Wash. 

Terrie Cloud, director at Cornerstone Advisors, underscores another essential benefit of cloud banking for financial institutions of all shapes and sizes: speed. “Cloud banking makes a bank more nimble and agile without having the overhead of infrastructure,” he says. “The main benefit is the ability to more quickly deploy solutions.”

Given growth estimates for the global finance cloud market, the frequency at which new goodies are raining down on banking customers should continue and might even increase. A 2022 report by Grand View Research predicts that the finance cloud market will have a compound annual growth rate of 20.3% from now until 2030.

That said, most banking customers are blissfully ignorant that the tech giants that created and sell access to the public cloud—names like Microsoft Azure, Amazon Web Services (AWS) and Google Cloud—are what makes financial life easier through a wealth of nifty banking features.

“From a customer’s perspective, you really shouldn’t care what technology and solutions your financial institution uses as long as you’re getting the value you expect and you’re achieving the goals you want,” notes Charles Potts, chief innovation officer for ICBA. “It’s the classic Oz situation: Pay no attention to the man behind the curtain.”

A sample of cloud’s greatest hits

Below are some of the critical advantages the cloud provides for community banks and their customers:

Scalability. “What’s really important about cloud technology today is the scalability,” says Potts. He explains that a suite of offerings can grow along with a bank’s needs and aspirations, without leaving behind latent infrastructure in need of addressing.

Using the cloud, community banks can enter new markets and lines of business far more quickly. In other words, today’s bankers rarely find their strategic reach exceeds their grasp.

“All of the things that bankers may want to achieve as part of their strategy, cloud-based technology is designed to make happen,” Potts says.

A more level playing field. “There are lots of community banks across the country that can build really cool things without putting in all the infrastructure costs, because of public cloud computing,” says Christian Ruppe, chief innovation officer for $3 billion-asset Colony Bank in Fitzgerald, Ga. “Cloud computing lets us build and offer unique concepts.”

One example of a cloud-enabled feature is TaxStatus. Late last year, Colony Bank signed on with TaxStatus to relieve some hassles for loan applicants. Now, an individual applying for a mortgage or business loan can check a box that will grant Colony permission to import required tax documents directly from the IRS.

“Our customers are saving 15 to 30 minutes on their applications because they don’t have to go and track down their taxes from the past two or three years,” says Ruppe. “We’re able to plug [TaxStatus] into our existing application because of how flexible we’re able to be with the cloud, and we’re able to do it at a cost that makes sense.”  

Tighter privacy controls. Coastal’s MacLean sees great behind-the-curtain benefits to how her bank uses cloud technology to protect customer data.

MacLean is keenly aware that for small business owners, digitizing the lending process “makes a big difference,” because applicants can submit information from anywhere without taking precious time off work.

For the bank, automating the capture of information in a “privacy-first” way would be nearly impossible without the public cloud. “It’s very difficult to mask or obfuscate data at scale and to do it reliably if you’re not relying on a cloud-scale platform,” she says.

“[Cloud banking] is going to allow us to support our customers when times are bad and help our customers take advantage of opportunities when times are good.”

—Christian Ruppe, Colony Bank

Cloud from Cornerstone Advisors urges all financial institutions to adopt a “cloud-first” mentality. “Institutions today have millions of solutions deployed in the traditional manner, so this change is not going to happen quickly,” he says. “But we’re big believers that as an institution replaces or augments technology, solutions should be with cloud-first software.”

Quicker off the mark

Ruppe agrees, noting that “the ultimate dream” made possible by cloud technology is “the ability to react more quickly than anyone else.”

For example, when the need to issue PPP loans hit, it took many community banks three to six months to have online loan processes up and running. 

With the full firepower of cloud technology, a bank like Colony could respond much faster to catastrophes, Ruppe says. A bank could post to its website a loan application that includes automated decisioning and cloud tools necessary for populating key information, allowing an entirely new loan application process to be rolled out in just a week or two. 

Cloud banking, he concludes, “is going to allow us to support our customers when times are bad and help our customers take advantage of opportunities when times are good.”