Blogs > How cloud technology empowers digital card issuance
22 junio –

How cloud technology empowers digital card issuance

Customers expect a digital experience, and the cloud is crucial for firms aiming to meet those expectations

Alex Hamilton
3 min

The rapid and effective provision of new cards to customers is perhaps neglected among the several interactive touchpoints between banks and users. As customers look for the right blend of physical and digital services, proper fintech card issuance can be a bridge between both worlds.

Adoption of cloud technology is rising across the industry, but many are yet to understand the benefits of cloud platforms across multiple aspects of their business. Similarly, some may still hold on to apprehension around using cloud systems to power such a security-specific function.

The benefits of adopting a cloud platform far outweigh any potential drawbacks. It provides an institution with a launchpad from which it can deploy innovative services for years to come. On top of that, it revolutionises the way they issue cards to customers.

Defining the cloud and understanding its benefits

Cloud computing has been around for the better part of two decades but has only seen a ramping up of adoption in the financial services sector over the past few years. IDC data indicates that among banking executives, 79% are using at least one form of public cloud, and 77% some form of private cloud.

A simple way to think about cloud platforms is a comparison to web-based email services. A user can have access to dozens of features, options, and capabilities without storing any of those applications on their computer.

Why banks are switching to the cloud:

  • Cost savings
    • Most providers are pay-as-you-go, and cloud contracts are often cheaper than maintaining on-premises systems.
  • Flexibility
    • Unshackle your teams by removing the need for system upkeep, and scale your business without needing to purchase more hardware.
  • Recovery
  • Collaboration
  • Seguridad
    • Cloud providers’ security spend factors larger than most organisations’ budgets for in-house on-premises teams.
  • Sustainability
    • Cloud infrastructures support environmental proactivity, powering virtual services rather than physical products and hardware.

Unifying digital banking, payments, and card issuance under a cloud platform

According to Forrester, more than two-thirds of consumers want all their banking processes based on a mobile application. Digital cards should be no exception. Customers shouldn’t wait weeks for card production, shipping, and activation.

Digital payments, banking, and cards must work in concert. Why provide a new customer with a swift onboarding process on your mobile app, only to tell them to wait for a card to arrive? Cloud-based issuance can create a virtual instance of the user’s physical card to be used from moment one.

This gives your new customers total control over their new account and payment options from the palm of their hand the day they create an account. The number of US adults using a digital account as their primary account rose 67% in 2020, and providing the right services for these adopters is crucial.

Interconnected payments, banking, and card issuance systems offer existing customers a range of options. It enables them to freeze transactions, reset their PIN, set limits, and more. It lets users track the delivery of their physical card, manage it in real-time, and activate it from the app without setting foot in a branch.

Cloud platform user experience

Intuitive experiences provided by technology giants and major online retailers have set the bar for user experience. It is no surprise that these paragons of digital ease utilise cloud computing at scale.

Card issuers must adapt to this decentralised world and deploy systems based on new technology. This includes microservices-based architecture and increased use of APIs. Hosted on a cloud platform, this enables independently deployable services to be modified and upgraded at the component level without having to change wider systems.

API deployment enhances competitiveness and activates intersystem connections to give customers the best user experience. A card issuance platform connected to digital banking, lending, or payments products provides an omnichannel experience from the moment a customer’s application is approved.

Public vs private cloud

Every financial institution is different, and so are the myriad challenges they may face in the marketplace. This is reflected in the strategic choices firms make when deploying on a cloud model.

A public cloud allows an institution to pay only for the resources it needs. This saves money on development or maintenance. Similarly, the cloud provider takes care of all administration, and scalability is achieved at the press of a button, rather than through ordering new resources to cope with an influx of traffic.

Private clouds offer all physical resources to a single customer, as well as provide an option of hosting architecture in-house as well as off-premises. Yet often the upfront costs are higher, and smaller workloads can result in a lack of a return on investment.

According to Ernst & Young (EY), every UK bank operating in the market today is moving to some form of public cloud, with 100% aiming to host their front-facing operations off-premises in the coming years. Almost two-thirds (63%) also plan to run their back-office platforms off-premises on a public cloud.

Scalable card issuing solutions and innovative business models

Financial institutions, banks, and fintechs looking to evolve must consider the advantages of cloud platforms and their impact. Card issuance needs to adapt to the changing preferences of consumers. Utilising a cloud-based infrastructure is a surefire method to ensure future stability.

Banks should consider what products and services their customers expect, understand demand and guide the development of their roadmap accordingly. An ability to provide enhanced and innovative services to digitally-savvy users will set firms apart from their competition.

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