The banking and finance sector has been an early technology adopter. Fintech emerged a few decades back to bring more efficiency, transparency, and accessibility to this sector and enable ease of service.
Changing market demands and technology evolution continues to influence this sector, pushing it further along its growth trajectory. The fintech market is expected to stand at USD 16652680 Million by 2028 from USD 6588780 Million in 2021.
The Rise of Fintech
The Fintech industry is also undergoing massive change at lightning speed especially as this sector warms up to cutting-edge technology adoption. The pandemic caused a surge in the Fintech market as businesses and consumers moved toward contactless payments.
Customers have also embraced the idea of on-demand finance and BNPL as they move away from time-consuming, traditional financial services. All these factors have rendered this industry red hot and are pushing banks to co-opt Fintech disruptors to manage massive technology trends like mobile, Cloud, AI, and more.
Convenient service, financial inclusion, and collaborations between national regulators and financial institutions are some of the factors influencing market growth.
The rise of the consumer-centric economy and the increasing focus on delivering contextual, hyper-personalized, and intuitive user experiences are contributing to the rise of this sector.
As this sector grows, so do the demands and the challenges. Technologies such as AWS come to the rescue here and help these organizations manage the demands of a disruptive market, navigate compliance and regulatory challenges, and drive elevated customer experiences.
Why AWS for Fintech?
Fintech is rapidly adopting AWS Cloud services to:
- Support operational activities and run core services.
- Improve customer interactions
- Improve communication with stakeholders and employees
- Improve collaboration
- Ensure business continuity
- Accelerate the speed of innovation
- Respond to market disruptions dynamically
- Increase their flexibility and scalability
- Improve security
- Fast-track innovation and help them stay ahead of the curve
Some of the key reasons for the growing popularity of AWS in this industry are:
Elevate Customer Service
AWS allows financial bodies to provide integrated and value-added services, boost user engagement, or deliver robust solutions to meet customer demands. It offers the broadest set of innovation tools, including machine learning (ML) and artificial intelligence (AI) services. This gives companies the opportunity to build their services on the most secure, compliant, and resilient Cloud with confidence.
AWS facilitates multi-channel relationships with customers and provides a holistic 360-degree view of the customer. Delivering contextual and hyper-personalized experiences become a piece of cake.
Fintechs today can look at moving core systems to the Cloud since they, unlike most banks, are typically not dependent on legacy systems. AWS is well-suited for this job as it is one of the most resilient and secure Clouds. AWS enables them to improve customer service and experiences by allowing them to remain connected with the customer anytime, anywhere.
Integrating core processes and legacy systems (if any) with the AWS Cloud increases process speed and ensures faster access and transactions. AWS also simplifies information access and makes it simpler for customers and banks to access the same with ease.
Fintechs can leverage AWS to digitalize key processes and workflows like investments, trading, and loans and adopt a truly customer-centric business model. All these factors enhance customer service, drive customer satisfaction, and ensure customer retention.
Customers are gravitating towards fluid, digital channels from traditional banking touch points. Self-service is fast emerging as a strategic priority for Fintechs to help customers meet their needs comfortably.
AWS Cloud enables Fintechs to leverage self-service applications to improve banking transactions. Companies can leverage the AWS self-service catalog and build a self-service environment for each line of business.
They can also add features and functionalities to meet evolving customer demands and leverage market opportunities that drive competitive advantage.
Improved and Secure Data Management and DR
Fintechs can implement robust and secure data management practices using AWS. It eliminates the need for 24×7 IT resources and allows them to automate key processes securely.
AWS also allows these organizations to store and manage large volumes of data securely while keeping compliance and regulatory demands in place. Transaction data can be archived and saved for future retrieval effortlessly.
Organizations can store the database of the transactions in compliance with the disaster recovery regulations in different geographical zones using AWS. AWS’ strong Disaster Recovery (DR) policies accomplish recovery within a short duration as well.
AWS removes the challenge of long procurement and provisioning cycles of data centers for Backup and DR. It also makes data management and backup more secure and seamless.
Improving Security, Driving Compliance
Security is the highest priority for Fintechs. It is the same for AWS as well.
AWS’s data center and network architecture are designed to meet the requirements of the most security-sensitive organizations like those operating in the banking sector.
AWS Cloud Compliance provides robust controls to Fintechs to simplify compliance and enhance security. The Cloud formation templates improve security and bolster data protection. The AWS Cloud Formation Tool allows organizations to deploy a security architecture at the click of a button while giving them the flexibility to retain control over application security.
Architectures from AWS Cloud compliance further assist these organizations to meet Payment Card Industry (PCI) Data Security Standard (DSS) compliance. It also allows them to automate processes that previously took months and assists them to focus on value-driven activities rather than managing IT infrastructure.
Auto-scaling for Elevated Performance
Fintech applications are prone to see many spikes and bursts depending on usage patterns. AWS supports them to manage these spikes through its auto-scaling features. This feature ensures consistent performance even during surge periods. Applications with stable demand patterns or that experience hourly, daily, or weekly variability in usage are best suited for auto-scaling.
AWS increases the number of Amazon EC2 instances during demand spikes. This helps in maintaining performance levels without having to allocate resources manually. Companies can decrease capacity during lulls to reduce costs.
AWS auto-scaling enables 24 x 7 x 365 availability and ensures that apps are running on an optimal number of AWS EC2 instances. This results in effective AWS Cloud management while driving cost optimizations that increase savings as they scale.
What is one of the key value propositions of Fintechs? Undoubtedly, it is the capacity to rapidly roll out new features and value propositions to meet customer demands. To achieve this, most organizations have embraced DevOps to enable rapid, robust, fast, and secure rollouts.
With AWS, Fintech organizations get built-in support for DevOps. AWS provides a comprehensive, ready-to-use toolchain for DevOps support. The AWS toolchain hosts a private git for their code base using AWS code commit.
This code pipeline drives continuous delivery and allows teams to automatically build, and test rapidly. AWS CodeDeploy automates code deployment making this process faster, agile, and effortless.
AWS delivers some impeccable capabilities to Fintechs while giving them all the support they need to enhance and improve their DevOps pipeline as well. Its well-architected and defined framework helps this sector build an efficient, resilient, secure, and high-performing, infrastructure for applications and workloads. Fintech organizations also stand to improve their overall security and compliance standing using AWS while remaining agile in a market driven by VUCA and evolving customer expectations.