Digitalization is driving a major shift in the banking industry and the adoption of cloud-native core banking systems is playing a key role in this transformation. These systems are designed to be agile, scalable, and secure, allowing banks to adapt quickly and easily to changing customer needs and market conditions.
Traditional on-premises systems can be inflexible and difficult to scale. With a cloud-native system, however, resources can be easily added or removed as needed, allowing for a more dynamic and responsive banking system.
With a cloud-native system, the cloud provider handles much of the maintenance and upkeep, reducing the need for costly in-house IT resources. On the other hand, On-premises systems can be expensive to maintain, especially as they age and require upgrades. Moreover, a cloud system is hosted in the cloud, so banks do not need to worry about maintaining and securing physical servers. This can significantly reduce the risk of data breaches and downtime.
Cloud-native core banking systems can be easily integrated with other digital technologies such as artificial intelligence and blockchain. This allows banks to quickly deploy new functionality and make updates in real-time, unlike traditional on-premises systems where updates can be slow and costly.
According to Gartner, in 2022, over 75% of global organizations will be utilizing containerized systems (important components of cloud-native systems) in production. Additionally, a study by Forrester predicts that the cloud-native market will reach a worth of $4.1 billion by 2023, with an expected compound annual growth rate of 32% from 2018 to 2023.