How the Cloud Can Help the FinTech Industry Thrive

Over the past ten years, we have witnessed a major e-commerce boom. This thriving industry created the need for ecosystem relationship management, or ERM, boosting a healthy ecosystem of start-up tech suppliers to serve several industries with online transactions.

Financial technology, or FinTech for short, is what makes these types of financial services possible online. Services like Apple Pay, Google Wallet, and PayPal allow customers to securely use credit cards to make online purchases, and FinTech services help companies better manage financial transactions as well as broad financial aspects of their business.

With the FinTech industry growing every day, there is a pressing need for secure and reliable hosting service providers. Cloud hosting makes this possible by being available for FinTech companies to ensure protected and instant transactions for every customer.

 

Choosing the Appropriate Hosting Option

It is neither a secret nor a surprise that the financial services industry is one of the most regulated industries in the world. Early on, a lot of companies were reluctant to choose third-party providers or transition to the cloud primarily because of the unique traits each company presents in terms of its hosting needs.

The stringent regulations placed upon the industry by the Financial Conduct Authority were also once a prime barrier for FinTech companies, although now the FCA encourages firms to take advantage of clouds and the beneficial opportunities they provide.

There are strict requirements for compliance these companies must meet simply because the industry is a prime target for cyberattacks and hackers. FinTech companies need to make sure their data is well protected by implementing infrastructures that are compliant and work by securing their data on a 24-hour basis.

This industry deals with extremely sensitive information, and a breach could be devastating to customers around the world. The adoption of cloud hosting enables FinTech companies across the globe to develop guidelines that reassure customers that these companies are secure and compliant, thanks to improved cloud migration. Also, outsourcing infrastructure security and compliance to your cloud hosting provider can save you time and money by leaving you more time to focus on security at the application level.

 

How Clouds Benefit FinTech Businesses

Using cloud technology for your FinTech business can pay off because clouds often boast few security risks, increased agility, and the ability to increase your speed to market significantly. In fact, 22 percent of small- and medium-sized businesses say that using the cloud in some capacity has given them a competitive edge, according to a survey from the Cloud Industry Forum, and 25 percent say it has provided greater flexibility to adapt to changing marketing conditions.

Although security concerns still exist, as with any hosting infrastructure, there is more confidence placed on hosted services and solutions now more than ever before. Also, once your company begins to grow, it may be beneficial to combine cloud hosting with more traditional infrastructure to increase your margins and optimization.

The FinTech industry is a dynamic field that is quickly shifting toward cloud and open environments. On top of the speed-to-market factor, cloud computing technologies also offer endless amounts of virtual computing power and unlimited storage space. There are no major upfront investments, and you only pay for what you use. Additionally, the freedom and ability to scale up or down as needed ensures your company meets every level of demand.

FinTech companies deal with e-commerce and payment transactions, typically with an end-user or consumer on the other side of the transaction. This means that speed of processing, latency, and dependable infrastructure is important for customer satisfaction. Forty-seven percent of internet users expect a website to load within two seconds, according to a survey from Kissmetrics, and 40 percent will abandon a site if it takes longer than three seconds to load. Using an infrastructure that is global, scalable, and delivers lowest possible latency has a big impact on the quality of the service.

Cloud-born businesses are able to expand greatly by utilizing services that scale up and down as their product offerings increase. Having a near-instant response time for scaling also enables startups to compete with larger financial organizations that are often tied down with regulatory requirements and in-house legacy IT systems. Also, the ability to control that scalability is important. That means that finding a hosting/cloud company that gives you the API infrastructure to be able to automatically scale up and down is critical. Many of the large cloud hosts provide this for virtual infrastructure, but not many do on bare metal or dedicated infrastructure. That makes a hosting provider that can provide the combination of the two very valuable.

Cloud computing offers great advancement opportunities for companies in the FinTech industry or entrepreneurs interested in diving into the field. The scalability, security, and costs of combining cloud and traditional infrastructures are reason enough to choose a hybrid-style setup to get started or expand your business.

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