Banking Frontiers

Contours of the cloud

- B. Yerram Raju is an economist and risk management specialist. He is also the Founder Director of the Telangana Industrial Health Clinic. The views are personal.

New Moon Day is a good day to start such a topic as no clouds can be seen in the sky in the dark night. The following tech words are common to hear in the lexicon: Cloud technology, Web servers, Web Links, Artificial Intelligen­ce, AI Cloud, Machine Learning, Block Chain, Crypto Currency etc. Cloud technology, partial cloud, partner cloud/shared cloud, creative cloud, sound cloud and many other nuances in cloud appear mysterious but the future of the firms in the entire globe is inextricab­ly linked to it. We travel in the inevitable unknown. Both the advantages and tremors are already visible with no single day seeing loss of billions as cyber fraud.

With the introducti­on of technology and Industry 4.0, people expected and regulators like late Dr. K.C. Chakrabort­y (former Dy. Governor, RBI) confirmed that the cost of financial services would drasticall­y come down and speed of delivery of services would accelerate to the advantage of the customers. While I am a strong advocate of the use of technology, I would not endorse the possessive­ness and a ride on the wave of ignorance of the common person who uses such technology, as I increasing­ly see the opposite happening. The objective of this article is to bring some awareness of this cloud technology and see whether the customers really got the better of technology and the bank staff too practice technology in as simple terms as they enjoyed the sunshine instead of the darkening clouds when they leave the offices.

dEFInInG cloud coMputInG

Cloud computing is the delivery of computing services - including servers, s t o r a g e , d a t a b a s e s , n e t wor k i n g , software, analytics, and intelligen­ce - over the Internet (`the cloud’) to offer faster innovation, flexible resources, and economies of scale. (

Cloud-computing services cover a vast range of options: basic storage of data, networking, processing power,

natural language processing, standard o ffi c e a ppl i c a t i o ns a nd a r t i fi c i a l intelligen­ce. Even quantum computing can be delivered via cloud. Our e-mail services, backup of the photos on our smart phones, video-streaming services and its business systems like the Netflix or Prime Video are all accessible through cloud computing services.

contours oF thE cloud

Most financial institutio­ns claim to have come on cloud services. Each Cloud Computing owner has certain contours of usage. For example, take the case of a large public sector bank like the SBI. It uses its web servers to advertise all the products – deposits, loans, insurances, guarantees, YONO, etc., unlike ICICI Bank that makes use of the web server 98% to serve its customers using internet services. The later proved certainly more efficient as it has been giving uninterrup­ted net service banking unlike the former where you will notice frequent breakdowns in its usage both by the staff and customers.

“Tech analyst Gartner predicts that as much as half of spending across applicatio­n software, i nfrastruct­ure software, business process services and system infrastruc­ture markets will have shifted to the cloud by 2025, up from 41% in 2022. It estimates that almost two-thirds of spending on applicatio­n software will be via cloud computing, up from 57.7% in 2022.”

rIsKs contInuE

It is, therefore, evident that all the future technologi­cal interventi­ons like the AI, ML, robotics, gaming etc., would all be through the cloud architectu­re. Owning a cloud is expensive for small finance banks and small firms, cooperativ­e institutio­ns, and payment banks. So is the case for all these financial institutio­ns to fully ensure that cyberattac­ks would not affect their businesses and customers adversely and intermitte­ntly. RBI has given exhaustive instructio­ns in this regard vide their master directions. (RBI/2023-24/107 DoS.CO.C RBI/ 2 023- 24 / 1 07 DoS. CO.CSITEG/SEC.7/31.01.015/2023-24 SITEG/SEC.7/31.01.015/2023-24).

While such huge data pile is available, it sounds i ncredible that financial institutio­ns err on due diligence and land up in non-performing assets. The scope for analysing borrower behavior and the behaviour of the directors of borrowing companies is enormous. Psychometr­ic analysis at half-yearly intervals is a whisker away with data availabili­ty and the facilitati­ng networking of such data through account aggregator­s, OCEN, and for ecommerce, ODNC and other platforms and all use only cloud. Each cloud of each institutio­n has contours.

MErGErs & AcQuIsItIo­ns

Banks when merged, data merger posed severe issues and they never came out in the open. Customers of such merged entities suffered severely, apart from bearing huge costs. The cost of regulation also has been increasing day by day or even hour by hour. Whatever the industry or profession, the new technologi­es are going to make a huge difference and not always without hassles. In some cases, people lose their jobs while in other people rejoice. For example, a carpenter, a welder, an electricia­n and a small

mechanical worker or a jobber on the machine, is just not bothered about either the Cloud or AI.

“AI has gone from feeling like an abstract idea to a familiar tool that can streamline workflows and generate new ideas. But not everyone has welcomed the technology, and instead see it as a threat to their very careers. It’s a push-and-pull that’s defined this year. The biggest AI workplace trends of 2023 show how the technology has shaken up work as we know it. They also give us a peek into how AI might shape 2024, as the technology continues to evolve at lightning pace.”


Regulation will continue to broaden and deepen as public sentiment becomes less and less tolerant of any appearance of preventabl­e errors and inappropri­ate practices. The taste of the pudding is in the eating. We saw the way SBI, the largest cloud data server, had to be nudged by the Supreme Court over the details of the data on electoral bonds. When such is the position of the highest Court of Justice in the country, how can the bank customers in the normal course be sure of getting all the legitimate data of their accounts. Cases of pensioners of banks took decades and are still waiting for resolution over the effective date to be again decided by the Court in May 2024.


When there were no computers, when a bank gave certain data and informatio­n, it was never questioned. Today, we are really in a cloud. All people know with comfort about cloud is it rains when thick and traveling from east. The clouds hit each other and pass over each other. In the case of cloud technology, it is difficult to determine the boundaries, if I want a shared cloud or partial cloud and the extent to which the regulation impinges on me when any of the involved parties violate a regulation. Digital currencies, crypto currencies and any new introducti­on of technologi­es go for blockchain technology and again through an unknown cloud!!

 ?? ?? B. Yerram Raju
B. Yerram Raju

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