Financial institutions can optimize their corporate customers’ working capital and supply chain operations by combining the power of supply chain finance and factoring solutions with the cloud’s scalability, performance, and security.

Financial institutions can give timely, alternative financing choices and faster approvals by digitizing the entire supply chain finance process. 

How does cloud technology play a role in supply chain finance?

Working capital finance solutions must be managed in an environment that overcomes the physical obstacles of present systems and processes to overcome the resistance between corporate treasurers and banks.

The cloud helps businesses and financial institutions store and access data fast and securely and provides the scalability and flexibility to facilitate innovation to meet their expanding business requirements.

Additionally, from a business perspective, the cloud provides three key benefits: cost savings, improved infrastructure, and future-proofing your firm through ecosystem scalability.

Together with an always-up-to-date software, all of these factors make the cloud an obvious choice for businesses and financial institutions alike.

The cloud and its implications for SMEs

Most Southeast Asia’s small and midsize enterprises (SMEs) face significant funding gaps. Cloud solutions can enhance SCF, which benefits SMEs. SMEs account for more than 95% of all businesses in the APAC and employ almost half of the workforce. They account for roughly 20% of GDP in low-income nations while accounting for 50% of economic activity in high-income countries. 

SMEs experience credit issues due to their size, despite their economic importance. Even in mature economies like Singapore or Japan, SMEs in the Asia Pacific struggle to find good banking services. According to the World Bank, the global credit deficit for SMEs is estimated to be $2.6 trillion. SMEs’ financial exclusion, which contributes heavily to the economy, is a missed chance for more inclusive growth in many nations.

With advances in consumer lending and SME working capital financing, digital lending will naturally become a significant revenue provider. Fintechs will be highly beneficial in boosting financial access and inclusion with assistance from cloud solutions. SMEs could, for example, use supply chain financing or factoring to get working capital loans. 

Hybrid cloud implementation: Best practices for banks

A hybrid technology approach is required to make the most of existing technology while combining it with cloud-based advancements to enable programs to run seamlessly. Banks and corporations can make real progress only by working together. Therefore it is vital to understand the best practices for using the hybrid cloud.

1. Take inventory of your assets: Banks need to thoroughly examine apps, data, and workloads. Using their private cloud to host critical apps and essential data would be best. Banks can transfer other apps to the cloud.
2. Get your architecture in order: Banks migrating to a hybrid cloud should ensure their app architecture is ready for the transition.
3. Select a cloud service provider(s): Cloud vendors such as AWS, Microsoft Azure, and Google Cloud Platform (GCP) offer complete hybrid cloud tools that banks can use.
4. Banks should adopt hybrid cloud in stages: To succeed with hybrid cloud in banking, don’t move all your apps at once. Start by migrating non-essential apps and services.
5. Orchestrate interoperability: To minimize latency, security issues, and outages, you must set up seamless interaction between your infrastructure and public cloud services in one environment.
6. Prepare for security and disaster recovery: Make security a priority at every stage of your hybrid cloud implementation. Employ effective technologies to synchronize security measures across heterogeneous environments. Popular cloud providers offer security as a service. Also, obtain a comprehensive disaster recovery plan and ensure that your digital infrastructure supports it.
7. Optimize costs: Banks can reduce the expenses of software development, deployment, and maintenance by reviewing what resources they are using and investigating new services that will help you decrease costs.
8. Surveil your hybrid cloud: A strong cloud monitoring strategy will guarantee solid application performance, high availability, and minimal prices across heterogeneous infrastructures. Any hybrid cloud monitoring approach should include automation.

The cloud will soon be the norm

Cloud adoption has gained pace across industries in recent years and has moved to the forefront of business transformation. Cloud architecture is promptly delivering what many companies are looking for at this moment: unmatched security, agility, and the ability to manage and extract insights from high volumes of data.

It’s not just the benefits of the cloud and customer expectations that are driving banks’ digital transformation. New regulatory and compliance frameworks – like GDPR and varying regional consumer privacy acts – are also compelling banks to adopt hybrid cloud.

The benefits of the cloud will become too important to ignore as the industry moves further into complete digitization, making it critical for firms to act now to deal with an unpredictable and constantly shifting financial services landscape.