Cloud is growing at such an enormous pace that it is hard not to embrace it, regardless of the sector in which a company operates. This is probably why we’re seeing companies across all sectors move some or all the operations to the cloud, along with the twin objective to save money and gain the benefits that come from it in the form of increased operational efficiency and higher productivity. The latest in that list is the banking industry, especially in Asia, that has always been known as a traditional industry with a conservative mindset. All that is changing now, as banking giants like the Mitsubishi UFJ Financial Group (MUFG), a well-known Japanese bank, is leading the way in cloud adoption.
MUFG announced that it is moving some of its operations to the cloud, and has chosen Amazon Web Services (AWS) as its partner for this transition. This change is expected to save the bank a whopping 10 billion yen or $87.2 million over years, not to mention the better quality of service it can offer for its customers. Currently, Japanese banks including MUFG are well-known for their not-so-user-friendly banking systems and slow processing times, and much of this is attributed to the fact that they use legacy systems where patchworks and updates don’t work so well.
With this transition, MUFG aims to be the first bank in Japan to offer a simple, convenient and yet sophisticated banking interface that’ll make it easy for customers to do all their banking transactions. In addition, it plans to introduce many fintech products that’ll expand its customer base and boost its revenue and market share in the long run. Also, MUFG plans to move its research operations to the cloud, so it can get better insights into customer behavior, and maybe even design products that’ll fill gaps in customers’ needs. All this means, cloud is likely to fuel MUFG’s strategic expansion over the next few years.
Besides better customer interaction, MUFG is also expected to save a lot of money. Presently, all data is stored in the company’s data centers that are becoming increasingly expensive to maintain. As data grows, this bank is forced to invest in more capital expenditure and this is also proving to be expensive for the company. With this shift to AWS, all data will be hosted at AWS’ datacenters, so MUFG doesn’t have to worry about capital expenses or maintenance. This is how it is expected to save more than 10 billion yen over the next five years, without cutting back on other areas of operations. The company plans to invest this additional saving back into the business, especially in areas of strategic IT investments and tech talent, so it can further improve its operations in the long run.
Overall, this move represents a big shift in the mindset of Japanese banks as they scramble to remain competitive in today’s business environment, and at the same time, provide the most easy and user-friendly interface for its next generation of banking customers. In this sense, it’s a great start for Japanese banks.
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