Sky's the limit for cloud technology

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Companies across the globe are increasing their use of so-called “cloud solutions” for handling payments. Europe leads the way, driven by the need to meet upcoming changes to regulation, but many are now embracing the benefits to secure a broader competitive advantage. Etienne Bernard, Head of Transaction Services, EMEA at RBS, says the opportunities are limited only by companies’ aspirations.

Etienne Bernard, Head of Transaction Services, EMEA, RBS
European businesses started really looking into cloud technology as part of their preparations for the Single Euro Payments Area (SEPA) regulation – a drive to simplify and harmonise payments formats by introducing a single set of standards. Many corporates were attracted to using external technology as a cheaper and faster alternative to developing internal solutions or buying hardware – particularly as they have much to do before the deadline of 1 February next year. But while regulatory compliance is the catalyst, companies are now starting to realise that cloud technology can bring far greater benefits and give them a competitive advantage in their day-to-day operations. Cloud technology involves using computing resources – hardware and software – that are delivered on demand over the internet rather than being hard-wired into internal systems. The agility it brings enables businesses to respond to changing or emerging opportunities and to enter new markets quickly and cheaply without the need for costly infrastructure. In terms of how they use it, in its simplest form a corporate can find an individual cloud solution provider to carry out a single, specific activity for them. There is nothing to stop companies adopting several solutions from several suppliers and signing multiple contracts. However, there are a few cloud technology providers which can offer an open architecture platform on which they can host not only their own solutions, but those of others as well. This flexibility means businesses can use the cloud for a wide range of activities in one place, enabling them to operate more efficiently and with fewer contracts and service level agreements. For example, at RBS we work closely with a number of IT vendors, one of which already delivers cloud-based solutions for a number of our clients. Those clients have a single point of contact with us – an organisation they already know, which should help ensure their risk and compliance teams are comfortable with the counterparty risk. Currently, cloud technology is mainly used for data transformation and enrichment – making existing information fit a new format and adding new fields to make it compliant externally and more useful internally. But it can also be adopted for a range of things such as mobile payments, virtual accounts and checking sanction lists. These services can be tailored to the corporate’s individual needs and, with flexible pricing options, even be adopted on a ‘pay as you go’ basis – far better than the old approach of buying a one size fits all package off the shelf with a big, up-front price tag. Another advantage of operating in the cloud is that it’s the IT vendor’s responsibility to maintain and update the solution as it develops over time. Ultimately, the corporate has to pay for the services delivered – but this amounts to a lot less than the cost of owning and updating the technology solution in-house. The concept behind cloud technology – using remote servers to process and share information – is not new. Social media, file sharing and storing music in the cloud is something many of us do without a second thought each day. Now the business community is waking up to the opportunities the cloud concept presents. It might start with meeting regulatory requirements but those who embrace it as a true business opportunity are most likely to emerge the victors.
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