Financial Services Companies Reduce Friction with Cloud-Based Applications

Experian is one of many financial services companies that have fully embraced cloud after the industry’s initial wariness.

The greatest concern at first was security, but hyperscale cloud providers have transformed security from a liability into a feature, says Tracy Woo, a principal cloud analyst with Forrester.

“Security is the biggest concern among financial services companies, but also the biggest driver for jumping to cloud,” she explains. “Today, security expenditures can be cheaper when in the cloud compared with on-premises, and the overall footprint and threat exposure surface can be smaller.”

Experian Looks First to the Public Cloud

In addition to public cloud, Experian has a private cloud and on-premises resources.

“We are public cloud first,” Cheung says. “If it can go in the cloud, we’re there. But we also have a large portfolio of customers, including major financial investment firms and large governments that don’t want their data in the public cloud. In those cases, we host their data on-premises.”

With so many varying data inputs and sensitive client and consumer data on hand, Experian makes security a top priority. Strong governance policies are enforced that strictly limit how cloud resources are accessed and provisioned. “We don’t allow our cloud environment to be provisioned with the click of a button,” Cheung says. “All of our provisioning is done with Infrastructure as Code. We control access based on permissions and rights that we’ve set up.”

Resources are tagged, and only people with valid roles and permissions can gain access. Only when identification is verified by multifactor authentication and finance approvals are in place is someone able to administer cloud resources. “Infrastructure as Code, Policy as Code, Monitoring as Code: You now have APIs and ways to control all of these resources through code,” he says. “Cloud gives you that capability. It’s huge for governance and security.”

For Jackson National Life Insurance, improving the customer experience has been a business differentiator for decades — since 1970, in fact, when it started using independent agents to sell its insurance products to customers, making it an early adopter of the now-common industry model.

Jackson’s products have evolved over the years, but its focus on delivering value to its agents and customers remains the same.

The company started its digital transformation journey in 2020 by deploying application programming interfaces through Google Cloud to connect with its business partners and open up internal development opportunities.

“It is a layer that helps us drive consistency,” says Muhammad Shami, Jackson’s vice president of enterprise technology. “Let’s say I need to look up a policy name or number. I call the API and get the information. Different channels are getting the same information and accessing the exact same data, which makes for consistency. It provided a maturation of our processes.”

RELATED: Learn why automation is the key to unlocking the value and power of hybrid cloud.

Cloud Powers Applications for Financial Services Pros

Managing APIs in the cloud has enabled Jackson to deliver a better user experience and to reduce paper-based processes. Today, all of the company’s internal business operations are completely digital.

As its digital transformation continues, Jackson is working to digitize its external processes where they touch agents and customers, such as on the company’s website.

“We launched a new product last year for financial professionals, and everything was completely digital,” explains Shami. “They loved it. They got all of the product information, calculators and tools, all straight from our website.

“The day the product launched, they had what they needed,” he adds. “That makes it very easy for financial professionals to do their jobs and recommend solutions that meet clients’ needs. We are able to deliver information when you need it, where you need it, as quickly as possible.”

Jackson’s product launch highlights one of the primary benefits of cloud adoption: quicker time to market. Cloud has made it far easier for Jackson to build and deploy new digital business processes.

“That speed enhancement is valuable to us,” Shami says. “Cloud helped improve our development processes, allowing us to more quickly use new technologies. All of the deployment processes, including our security checks, have become faster. This has sped up our time to market for new products.”

Currently, about 40 percent of Jackson’s workloads run on cloud, mostly Microsoft Azure. 

Jackson is continuing to work on its on-premises data center, but it is very focused on pushing its digital transformation further into the cloud. It has developed a process for migrating resources to the cloud as needed.

“We’ve created a framework for deciding what goes in the cloud and what doesn’t,” Shami says. “It has to have a business value to it; that needs to be clear at the beginning. Anything from scratch or new, it will be in the cloud. And Software as a Service is our first option.”

The financial efficiency of cloud’s expense structure — pay only for what you use — is one of its most attractive features because it allows companies to move faster.

That was certainly an adoption driver for OneMain Financial, which serves nonprime customers with credit and loan products, as it shifted workloads onto Microsoft Azure.

When managed correctly with strong governance, cloud can deliver lower computing and labor expenses that make it more budget-friendly than using on-premises resources, says OneMain Financial CTO Larry Fitzpatrick.

“Expense is proportional to consumption,” he says. “This allows us to start small with innovative solutions and defer absorbing the operating cost until it’s delivering value at scale. This has helped us immensely to implement test-and-learn strategies that converge on optimal solutions a lot faster. We can realize ­benefits sooner than we could have in a wholly on-premises delivery model.”

RELATED: The financial solutions and services that can help your business.

While cloud’s expense model offers top-line value, it also delivers direct value to OneMain Financial’s customers through an improved customer experience. The company’s website and mobile apps, built on Azure, enable customers to interact with its portfolio of personal loans, credit cards and financial wellness offerings. OneMain Financial has used the cloud to shape an attractive digital experience for its customers.

“We are focused on building capabilities that deliver a seamless experience for our customers, however they choose to engage with us,” Fitzpatrick says. “Our company is continuing to introduce new offerings while innovating our personal loan products and our digital customer experience. Over the past several years, we have launched a digital-first credit card business; grown an auto lending business; increased the sophistication of d­ecision-making and risk management; and allowed customers to engage with us over web, mobile, email and SMS in addition to at branches and via the phone.”

Looking beyond these customer-centric benefits, cloud has also provided OneMain Financial with the ability to innovate more quickly. “In addition to customer benefits, cloud has productivity and risk benefits for our business, creating a flywheel effect,” Fitzpatrick says. “We could not have accomplished what we have in the time we did without the agility and efficiency of working in the cloud.”