Traditional banking, financial services, and insurance (BFSI) institutions worldwide are under immense pressure to innovate — and quickly. Singapore, Asia’s leading digital hub, is no exception. The combination of intense competition as new players enter the financial market, evolving customer expectations, and the emergence of newer, more appealing business models means that maintaining relevance is essential. According to the “FinTech in ASEAN” report by UOB, PwC Singapore, and the Singapore Fintech Association, Singapore is home to around 40% of fintech companies in ASEAN and attracts nearly 50% of the region’s fintech funding.
Local fintech companies such as Grab, Razer, Funding Societies, and PolicyPal are becoming increasingly aggressive, while international entrants like Revolut and Payoneer have recently joined the market, adding to the competitive landscape. These challengers rely on cloud-based technology stacks, which allow them to innovate, scale, and launch new offerings rapidly.
Moving to the cloud: More than just an innovative step
Cloud capabilities are so critical for both business and economic growth that investors continue to increase their investment in Singapore’s cloud infrastructure. For example, Amazon recently announced plans to invest SG$12 billion in the country’s cloud computing tech stack. Additionally, Singapore’s government is bolstering the financial industry through initiatives like the Financial Sector Development Fund (FSDF), which will receive a SG$2 billion top-up to support growth and scalability. Being in the cloud means having access to cutting-edge technologies that can drive smarter decision-making, automate repetitive tasks, and personalise customer interactions.
However, against increased and evolving customer expectations, BFSI organisations must strive to meet the growing demand for quick, contactless payments. Many financial institutions are either developing or have already implemented a cloud strategy. Yet, some traditional players are still unsure about moving to the cloud. Why so?
Security concerns
Handling sensitive financial data in a cloud environment raises important questions about data protection and sovereignty. With stringent regulations and heightened cybersecurity concerns, these issues are amplified. While cloud service providers offer advanced security features, including encryption and multi-factor authentication, apprehension about potential data breaches remains a significant barrier.
Limited financial resources
The costs associated with moving to the cloud can be substantial. This includes not only the initial investment in cloud infrastructure but also ongoing expenses related to maintaining and managing cloud services. For many financial institutions, particularly those in Singapore’s tightly regulated environment, these costs can be daunting. The need for specialised skills and the potential for unforeseen expenses further add to the financial burden.
Regulatory compliance
Singapore’s rigorous regulatory standards make ensuring compliance during and after migration to the cloud a complex task. However, clearer guidelines from regulators like the Monetary Authority of Singapore (MAS) are helping to demystify the process and provide a framework for successful cloud adoption. By leveraging cloud technology, institutions can improve agility and scalability, save costs, enhance customer experiences, and bolster security.
Enhanced agility and scalability
Cloud technology offers the flexibility to respond swiftly to market changes and customer demands. This agility is critical for financial institutions aiming to stay competitive in a rapidly evolving landscape. With the cloud, BFSI organisations can scale their operations up or down as needed, ensuring they are always prepared to meet current and future demands.
Cost savings
Moving to the cloud isn’t just forward-thinking; it’s financially smart. With a pay-as-you-go model, financial institutions only pay for what they use, avoiding the wasted costs of underutilised on-premises infrastructure. Additionally, cloud adoption eliminates the hefty expenses associated with upgrading outdated systems, making it a more cost-effective choice in the long term.
Enhanced customer experience
The cloud drives rapid innovation, enabling financial institutions to launch new products more quickly. In a market where customer expectations shift constantly, the cloud allows BFSI institutions to stay ahead, delivering top-tier services that exceed demands and providing them with a decisive edge.
Increased security
Cloud services often surpass traditional on-premises systems in security. With expertise in cybersecurity, cloud providers deliver stronger protections than most in-house teams can manage. Features like multi-factor authentication and advanced security certifications help safeguard data, even as transaction volumes grow. This robust security is vital in today’s digital-first world.
With the right cloud strategy, Singapore’s financial sector can not only keep pace with innovation but also lead the way in shaping the future of finance. Embracing the cloud is more than a technological shift; it is a strategic move that promises long-term success and a competitive edge in the digital landscape.
