There are many benefits that SaaS (Software as a Service) offers to financial institutions. So much so that many of the top banks, like Bank of America and HSBC, use it to enhance their services, improve operations as well as cut costs.
We’ve put together this guide on how SaaS is used in banking to help you learn more about SaaS, how it benefits banks and some examples of the best tools for financial institutions. Let’s get started.
5 Reasons to use SaaS in Banking
SaaS and cloud services are more secure than using on-site software. The nature of the internet means that information is stored in a remote location, which makes it less susceptible to data loss or theft. This is especially important for banks, as they hold sensitive information about their customers and businesses; keeping this data safe is crucial to maintaining customer trust and brand reputation. Because it’s not being stored locally on your servers, SaaS doesn’t require much maintenance or upgrades—all you have to do is log in and use the software.
Following are some reasons banks are now preferring SaaS over traditional software:
1. Inexpensive and Flexible Payments
One cost associated with purchasing software outright is upfront licensing fees: if you don’t have enough money at once, you have to wait until later when you can afford them (or else pay interest on credit). Another option is renting a seat from another company, but this can also be expensive because all parties involved must negotiate payment terms for every new customer who uses their product – plus, there’s still that initial licensing fee.
2. Security of Your Data
SaaS applications are hosted in the cloud, which means they’re hosted on a secured third-party server. That makes it easier to keep your data safe because you don’t have to worry about the security of your own computer or network; the hosting company handles everything for you.
SaaS applications can be hosted on any computer or website, but they’re often hosted on one specific server that’s used only by that particular application.
3. Efficient Scaling
SaaS is a very efficient way of scaling up or down as needed. You can add or remove users as needed, storage as needed, processing power as needed, and software as needed. That’s a lot more flexibility than you get with on-premise systems.
The ability to scale up or down quickly means that you don’t have to make major capital investments in infrastructure or software at the start of your project. You can also be more agile about changes that might occur because of business growth or reorganization due to mergers and acquisitions (M&A).
4. Cross-platform Compatibility
SaaS can be accessed from any device, whether it’s a desktop computer or a mobile phone. This means you don’t need to install software on your own devices. You also don’t have to upgrade or maintain the platform, back up data, recover from hardware failures, or secure it against hackers.
5. Simplified Maintenance
Maintenance is streamlined with SaaS because the application vendors handle most of it for you. They’re responsible for regular updates, patches, and new features that can be easily deployed by them at any time.
A lot of the technical work is done remotely, which means that there’s less need for internal IT staff to manage upgrades and changes.
As a result, SaaS makes it much simpler than on-premise software because there’s no need to install anything yourself or buy additional hardware to scale up as your business grows; everything happens automatically in the cloud without any significant impact on your budget or resources.
6. Improved Collaboration
SaaS solutions can help banks improve collaboration between departments by providing central access to data and applications regardless of location or time zone. This makes it easier for employees to work together on projects with minimal disruption in productivity or performance.
Here are ways how SaaS is used in the banking and financial sector:
1. Project Management Software
Project management software is a tool that helps manage a project, organize and prioritize tasks and resources as well as track progress and performance. Project management software is used by companies of all sizes, in both the private sector and government agencies, to plan, control, monitor, and report on projects or programs.
It also allows managers to keep track of all activities related to each project so that they can make informed decisions about them when necessary. With project management software, banks can easily view all their current and upcoming projects at one place. This enables them to have better visibility into their projects at any point. In addition, it allows you to set up automated alerts so that you can take action before deadlines are missed, or problems escalate out of control.
2. Financial Management Software
Financial management tools typically provide real-time analytics capabilities that allow banks to track how much money they have in each account at any given time, as well as how much each account earns or spends on a daily basis. Banks can use this information to better understand their customers’ behavior patterns and predict when customers might need additional services.
3. Compliance Tools
Secure and scalable software as a service (SaaS) solutions are ideal for compliance tools. They can be accessed from any device, making them easy to use and easy to maintain. SaaS solutions offer a wide range of features that make them cost-effective, including:
- Secure (encrypted connections)
- Scalable (scalable computing power)
- Easy to update
By using SaaS solutions, banks can avoid many of the common issues associated with software licensing costs and maintenance fees associated with traditional on-premises systems.
4. Risk Management
SaaS is a great way to manage risk. Banks can use SaaS to monitor risk levels, make it easier to detect risks, and review how they are managed.
Fraud detection is one of the most important aspects of managing risk in banking because if you don’t detect fraud, it can have huge consequences on your financial institution. In 2014, UK banks paid out more than 850 million dollars in fines for failing to prevent money laundering and other financial crimes.
Cybersecurity is another area where SaaS helps banks minimize their exposure by detecting unusual activity on their networks as well as identifying potential threats before they become actual problems (e.g., ransomware).
5. Customer Relationship Management (CRM)
Customer Relationship Management (CRM) is a software application used by companies to manage customer relationships. It can be used to manage customer data, track customer interactions, and generate reports. This can include generating leads, managing marketing campaigns, and tracking customer satisfaction.
6. An Analytics Tool
Analytics is the process of collecting, cleansing, transforming, and modeling data to make it useful for decision-making. The resulting information can be used to identify patterns and trends in data that can help you make better decisions. Analytics has been around for a while, but SaaS offers new opportunities for banks to use this technology because it offers easy access to tools like Google Analytics without having to hire an analyst or developer.
7. An SEO Tool
SEO is an important part of the marketing strategy for any business. It’s a long-term process, but it can help you get your content in front of the right people and make sure that you’re not missing out on opportunities for conversions. In addition, good SEO can help improve the flow of organic traffic on a bank’s site.
SEO is especially useful for banks that have websites that need to be optimized or have user experience issues. SaaS tools can help identify and fix these problems so your customers have a better experience with your site or app, which will lead to more conversions and success.
8. Video Marketing Tool
Video marketing is a great way to reach new customers, existing customers, and prospects. It’s also one of the most effective ways to reach investors.
Video marketing is an easy-to-understand, engaging way to tell your story in a visually compelling way that conveys the brand of your company or organization and its values. In other words: people like watching videos because they’re entertaining.
Some of the best-known ones include Wistia, Vidyard, and Brightcove. These platforms allow you to upload videos, customize them with effects, embed them on your website or social media pages, and track analytics such as views or engagement rates.
The best use of these SaaS tools is to create explainer videos because a lot of people don’t understand everything about banking — they might not even know what it is! Banks can use explainer videos to provide basic information about products or services that can help customers make informed decisions about their financial needs.
9. A Social Media Marketing Tool
Social media marketing is a powerful way to reach customers and get them to engage with your brand, but the task of managing your social media presence can quickly become overwhelming if you don’t have the right tools.
The most important thing about a social media marketing tool like SproutSocial is that it allows businesses and marketers to track their performance on various platforms. The platform also features an analytics dashboard that gives users insights into how well their campaigns are doing across various channels, so they know what content resonates best with their audience and which posts perform better than others. This type of analysis helps companies improve their strategies for future posts, ultimately leading to more conversions and greater customer loyalty.
SaaS offers Many Advantages for Banks and Financial Institutions
The advantages of SaaS are manifold. It is a cheaper alternative to traditional software licenses, which can cost banks up to $50,000 per year for each employee using the software. The flexible nature of SaaS allows financial institutions to scale their use up or down as needed, and it provides them with greater control over the costs associated with implementing new technologies.
Furthermore, by using SaaS rather than purchasing proprietary software licenses, institutions can ensure that their employees are using identical versions of any given application across all platforms (desktop computers and mobile devices). This reduces maintenance burdens for IT departments because there is only one version of each application that needs to be maintained.
SaaS is a great solution for banks, financial institutions, and fintech companies due to its many benefits. It provides a chance to introduce more innovation into banking processes, helping them become more efficient and enhance customer experience. SaaS can help your business grow faster, even with limited resources, because you don’t have to buy software licenses or hardware. Also, using SaaS applications in banking is easier than ever now that there are so many options available on the market.