As the impact of the pandemic on business and consumers becomes clearer, key lessons are emerging. First, digital transformation efforts were accelerated. Yet, these initiatives sped up unevenly, further widening the gap between industry leaders and laggards. Second, leaders overwhelmingly chose cloud computing as their foundation for future innovation. In particular, the financial services industry offers several lessons in how cloud computing helped extend the advantages of industry innovators.
While no one expects a global pandemic, those organizations that were already prepared to quickly respond to change were better positioned. For example, life insurance and annuities provider SE2, in a webinar titled How Financial Services and Insurance Can Use the Cloud to Build Agility, noted that it was able to quickly shift employees to remote work because it was already using cloud-based workflow solutions.
SE2 also used the cloud to address new IT infrastructure issues. Prior to the pandemic, the company thought nothing of sending someone to a remote site to reboot a router. Although routine, hands-on activities like these were suddenly off the table, the company’s cloud-based options provided ready alternatives to address challenges.
Meeting Changing Customer Needs
In addition to evolving employee needs, customer needs changed drastically, too. Consumers struggled with both the financial implications of the pandemic and needed new ways to interact with financial institutions.
Agile banks were able to quickly offer new digital services to customers who were suddenly unable to visit their local branch. For example, a large U.K. bank built a chatbot to answer Covid-19-related questions, such as how new mortgage payment deferral rules would impact their credit ratings. According to Amazon Web Services (AWS), the bank was able to stand up the solution in just two weeks, using the same underlying technology as Amazon Alexa.
Moving Forward with Agility
In a May 2021 poll among its readers, trade publication American Banker found that 57.9% of respondents listed “accelerate digital transformation and cloud enablement roadmaps” as a top priority. And when asked to name key drivers that are accelerating disruption and digital growth in the months ahead, 100% of respondents said the cloud, followed by artificial intelligence (60%), robotic automation processes (40%) and advanced analytics (40%). Perhaps not coincidentally, these latter technologies are most effectively supported by the cloud.
In addition to their common view on enabling technologies, financial services organizations that were able to quickly transform shared several common characteristics. They began with a clear vision of what they needed to accomplish organizationally and for the business. And they approached the digital journey from the customer’s perspective, asking what customers need and how their engagement may be changing. From here they identified digital channels that would get them closer to the customer and hence more effectively meet those needs.
Global Atlantic Financial Group exemplifies these approaches. Designing its digital roadmap before the pandemic hit, it took a two-tiered approach to cloud migration. First, moving day-to-day operations into the cloud was a top priority because this would allow it to automate processes, and gain efficiencies. The company was able to respond nimbly to the pandemic due to its proactive approach. Employees were easily empowered to work from home. Second, they created a new revenue stream by quickly opening new digital channels that enabled the company to sell its policies through online marketplaces.
Also, by using cloud-native technologies, the firm can focus on developing new capabilities like advanced analytics to grow new market and product opportunities — giving it a better view into industry trends and consumer expectations. This, in turn, will help it better anticipate and respond to future customer requirements, thus creating a continuous cycle of greater innovation, agility, and resiliency.
While many industries are just scratching the surface of cloud’s full potential, the financial services sector illustrates how innovative capabilities by providers like AWS can empower business agility and innovation that further differentiates the business.
For more insights read, Agility, Resiliency, Security: It all starts with AWS.