Cloud computing has been a crucial technological enabler for cutting-edge client services and digital transformation. By utilizing innovative service models and technology innovation to provide customers with new and improved services, cloud computing helps industries to boost output, cut costs, and increase the adaptability of internal business operations. Cloud computing can accelerate the financial sector with its digital transformation.

The industry is currently shifting to cloud to benefit from cloud computing. New opportunities for customer service delivery, meeting their needs and expectations, are as important as improving security, lowering costs, and increasing business flexibility. Cloud computing can also help mature financial institutions find new ways to compete with FinTech market entrants. 

When it comes to ensuring integrity and availability, cloud computing appears to be on par with (if not better than) other traditional IT paradigms. Because of their distributed nature, cloud services embody redundancy, high availability, and resiliency. Financial organizations can scale in the public cloud far more than they could in isolation. The building blocks of cloud offerings and the core business of any Cloud Service Provider are resilience, speed, and security. CSPs typically have enhanced security than most individual businesses can maintain and manage on-site. Furthermore, because cloud is (one of) their core business, the big cloud providers have large teams of security engineers and are constantly investing in meeting the strictest and newest security standards that continuously adapt to managing evolving threat vectors and threat actors. 

However, due to the highly regulated nature of the financial industry, cloud adoption must consider the sector's tightly controlled nature and pay special attention to stability and safety. African financial institutions operate within a framework of financial regulations designed to ensure proper governance and risk management (internal governance standards), especially when third parties are involved in ICT system operation. 

Significant cloud technology features in financial services necessitate special attention and consideration. Given the rapidly changing cloud service environment, close interaction between African financial institutions and their governing body and banking regulatory bodies will be critical. The potential for agility and flexibility of cloud computing extends beyond the boundaries of a single jurisdiction. A fragmented understanding of cloud by the regulator regarding key considerations can severely impede Africa's Financial Institutions' systematic approach to cloud, whether they rely on one or multiple providers in a multi-cloud environment. A unified understanding of Cloud will foster the adoption of public/hybrid cloud and multi-cloud use by Kenyan financial institutions.

Banks would eventually be able to provide more innovative services to their customers across Kenya and Africa, allowing FSIs to focus on their core businesses while leveraging CSPs' expertise in offering secure, scalable, reliable, and fast networks and computing. 

Banks must rely heavily on technology to function. On-premises systems deployed locally on the company's computer infrastructure have traditionally solved this problem. However, technological progress has accelerated dramatically, requiring banks to embrace this advancement in the financial market. They do so deliberately and strategically.
Cloud computing has emerged as a critical technology for developing new financial services, innovating, collaborating with third parties, and competing in the digital context. The market determines the rate of change. Banks require flexibility and speed to market, and cloud computing has the potential to meet both requirements. Banks need cloud technology to compete on a level playing field with other non-regulated players entering the market. Innovative, rapidly evolving cloud technologies enable banks to use the best-suited technology for customers and business processes. Customers nowadays expect immediacy and personalization. This may necessitate banks relying on third-party providers of new – sometimes tailor-made – general-purpose services. Cloud computing also allows for greater specialization. Banks can devote their top talent to business problems while outsourcing non-core capabilities such as infrastructure management to CSPs.

Market developments indicate that, in the future, the majority of IT tools required to meet customers' needs will run 'cloud-first strategies. As a result, delaying a financial institution's cloud adoption may limit the institution's competitiveness in comparison to FinTechs and Big Techs. Banks are currently facing an overall trend in the IT industry, expected to continue.

The ability to access transformational technologies via the cloud is a driving force behind this trend. This option supplements the overall benefit of cloud computing, which allows users to access vast and growing amounts of data in a cloud ecosystem. Today's transformation technologies are fundamentally and rapidly altering how we think about business. They are driving a shift in investment from legacy technology and business strategy to investing in more innovative business models supported by new innovative technologies, and they are critical for businesses to remain competitive, viable, and potentially secure. Analytics and "Big Data" technologies promise a slew of advantages, including:

  •  Advanced insights into complex data sets, 

  • The creation of new business opportunities 

  • The reduction of fraud 

  • Significant improvement in cyber security intelligence. 

Similarly, AI allows for highly complicated interplay between entities, such as assisting end users with problem-solving. These transformation technologies can be swiftly integrated into businesses as part of increasingly complex and dynamic ecosystems that are frequently more transparent and resilient than their legacy counterparts. They support increased connectivity demands from clients and stakeholders who demand faster access to data and services.

These cloud business relationships and operational collaboration with CSPs aid in the introduction of innovative service solutions, unlocking the previously untapped potential for banks' business processes.

Dealing with peaks in computing demand is one of the most difficult challenges in banking IT. They could be caused by the normal day cycle. Banks dedicate themselves to providing stable, dependable, and trustworthy services to their clients. Financial security is a right.

For banks, the transition from on-premises IT solutions to cloud is a deliberate and systematic process. It builds on and evolves existing bank IT structures and services. Private cloud solutions can be built gradually, transformed into cloud model combinations, and eventually adopted in a diverse environment. This journey is an evolution, not a disruption:  

  • Build 

  • Transform

  • Embrace

Financial institutions must succeed in a rapidly changing environment by implementing leaner operating models and focusing on business value. Cloud services are more than a technological trend that gives ICT solutions previously unseen agility and flexibility. They can also have a significant and positive effect on the balance sheets of financial institutions. Traditional on-premises IT infrastructure and developments necessitate an upfront Capital Expenditure (CAPEX) incurred by a business to create future benefits such as asset acquisition, which must be designed based on maximum workload. The system will not be available until the projects' completion, and large advance payments are usually required. Cloud-based technology, on the other hand, allows financial institutions to add or remove resources as needed.

This allows IT resources to be scaled up and down based on the needs of the business, and the pay-per-use model facilitates flexibility. As a result, IT operations can shift from CAPEX to OPEX incurred for day-to-day business operations. Finally, it adds value to the business.