Cloud banking allows banks to provide services to customers through cloud computing. It reduces costs for banks by eliminating the need to purchase and maintain expensive on-premise software and hardware. However, security concerns remain a challenge as banks are hesitant to move customer data to the cloud. A proposed solution involves hosting bank applications through a large company like Google. This would standardize updates, integration, and access across banks while keeping customer data on-premise. Widespread adoption of cloud banking could generate significant cost savings for banks and new revenue streams for cloud hosting providers.

1. Cloud Banking
by Partho H. Chakraborty

2. Overview
• Cloud Computing is defined as an on demand Internet based computing environment
where you pay only for resources that you use
• Users need not own anything apart from a browser and an internet connection and do
all the required transactions without actually owning the software
• It is an evolution in the way computing can be done and the journey started from
Mainframes to Cloud today
• As per Grail research, what was a joke for CIOs a year back is now number 2 on their
plate
• Cloud can be private, public, community or hybrid
• Cloud based delivery can be classified as Saas, Daas, Paas, Iaas
• Cloud can be hosted or custom developed or it could be a combination of both.
• Key Issues in Cloud is Security as many head Honchos are still not sure how secure it
is, as the hackers are getting better and sophisticated
• It is not New nor is the concept Alien but it is certainly a Hotly discussed topic
Partho H. Chakraborty Cloud Banking

3. Cloud Taxonomy Courtesy - TCS
Partho H. Chakraborty Cloud Banking

4. Financial Cloud
• When Financial Institutions such as Banks use Cloud for their
financial requirements it is called as Financial Cloud Computing
• The biggest challenge in Financial Cloud is the perceived notion that
the data could be compromised
• It looks to be a trade off between costs and security
• Financial Institutions are joining Open Data Center Alliance, which is
vendor agnostic
• Banks have started using Private Clouds but it is limited and it
needs a lot more to be done
• Central Banks need to take the lead in Cloud Computing as it will
then give the impetus for other banks to follow
Partho H. Chakraborty Cloud Banking

5. Current Problem
• Disparate Systems need integration
• Need to upgrade software periodically
• Need to be BASEL II and IFRS compliant
• Need to adapt to Regulatory Requirements
• Scalability issues
• Risk a major issue
• Software costs and implementation costs going up and so are support costs
• Banks also have costs in IT staff and maintaining hardware, software and network
• Mergers and Acquisitions become a major challenge especially with large banks
having many lines of business and branches
Partho H. Chakraborty Cloud Banking

6. Challenges
• Banks not keen to adopt Cloud
• It looks like a wait and watch game
• No support from Central Banks
• Issues of Regulation and Compliance
• Product Companies averse to lose revenue as it will be Pay and Use
• Customization a Challenge
• Location of Cloud could be a major issue
• Service oriented companies could see a substantial dip in their revenues
• Smaller companies could become non-existent in this new scenario and service
oriented companies looks to bear this brunt.
Cloud Banking
Partho H. Chakraborty

7. Proposed Solution
• For example a company like Google hosts
various applications from various product
companies.
• All access will be through Google UI
• Product companies can be in any location
• All products will be updated with the latest
releases
• Data stays in bank. All they do is access various
services as required
• All transactions will be encrypted
Partho H. Chakraborty Cloud Banking

8. Proposed Solution - Architecture
Central Bank
Google Interface
SAP Oracle Misys
Google Interface
Mobile
Bank A Laptop Desktop ATM Bank B Handset
Data Telephone Data
Note: Google is just mentioned as an example. It can be any company which can host
the service such as TCS, Wipro, etc.
Partho H. Chakraborty Cloud Banking

9. Cloud Banking
• Process flow by client to establish limits
Partho H. Chakraborty Cloud Banking

10. Cloud Banking
Partho H. Chakraborty Cloud Banking

11. Cloud Banking
• The entire process could be done through the Cloud,
especially if both buyer and Supplier are banking with
then same bank
• Cloud Banking enables the customer and bank to
move on to paperless transaction with a host of
benefits such as:
• Any Time and Saves Time
• Any Where
• Instant Cash
• Error Free Documentation
• Empowering Customers
• Transfer of Money in Moments
• Cloud Banking generates Carbon Credits
Partho H. Chakraborty Cloud Banking

12. Revenues
• Let us take a sample case:
• Product: SAP FICO
• Users: 10
• License Fees: ` 100,000 per user/per annum
• ` 1,000,000 per annum
• Banks: 10
• Users: 20
• Hours : 6
• Days: 200
• Revenue: ` 5,000,000; ((100,000/24)x6x200)
• Sharing: 20% to Google
• Net Revenue: ` 1,000,000
 This is a very simple case but it highlights the savings to bank and that
this business would earn in volumes
Partho H. Chakraborty Cloud Banking

13. Proposed Road Map
Partho H. Chakraborty Cloud Banking

14. Summing Up
• Brand value of company would increase
• It would truly be a pioneer in Cloud Computing
with others emulating it
• The beginning would be from non-core products
but eventually handling all the bank’s requirements
• Smaller Banks would be trendsetters and the
bigger ones would follow
• Pricing, Convenience, Security, Customization and
Robustness would be the key issues
Cloud Banking generates Carbon Credits thus greening the
environment
Partho H. Chakraborty Cloud Banking

15. Thank You
Partho H. Chakraborty
A – 305, DSR Spring Beauty Apts.,
124/1, ITPL Road,
Brookfield, Kundalahalli,
Bangalore – 560 037
INDIA
Tel: +91 - 80 – 420 50293; Cell: +91 - 99863 22504
Email: parthohc@airtelmail.in; parthohc@rediffmail.com