As our digital landscape continually evolves, the prominence of cloud technology in businesses has soared. This surge is a sharp contrast to past reservations about adopting cloud technology. Today, it’s increasingly rare to find a technology vendor that doesn’t offer cloud-based solutions.
InsurTech company Novidea recently highlighted four of the major benefits of using cloud-native platforms within insurance.
This shift towards the cloud has been driven by several factors. The Covid pandemic has certainly played a significant role by necessitating remote work, thus speeding up the transition to cloud-based technologies. However, even before the pandemic, large tech companies like Salesforce, which saw a 150% growth between 2016 and 2020, were making substantial headway in pioneering businesses.
The trend towards cloud adoption shows no signs of slowing down. Organisations across various sectors are aiming to increase their migration to the public cloud significantly, with cloud services expected to grow by 32% annually by 2025, according to McKinsey.
In this context, let’s examine what ‘born-in-the-cloud’ or ‘cloud-native’ really means. Essentially, cloud-native solutions refer to those that are exclusively designed, built, deployed, and managed within a cloud computing environment. Novidea, built on the Salesforce SaaS platform, exemplifies this approach.
Several InsurTech vendors tout their cloud solutions. Yet, upon close inspection, these so-called ‘cloud-based’ offerings often turn out to be legacy off-premise solutions that have been retrofitted for remote accessibility.
In practice, this retrofitting usually involves legacy software providers circumventing the expensive and time-consuming task of rebuilding their applications for the cloud. Instead, they create web-based front-end interfaces attached to legacy application architectures in the back end.
The benefits of true cloud-native software are manifold, ranging from lower total ownership costs and zero maintenance for customers to automated updates, elastic computing power that adjusts to business needs, and seamless integration with other cloud-based systems.
These benefits are evident in four critical areas:
- Scalability: A cloud-native insurance platform lets users adjust their usage in line with fluctuating needs, without requiring additional hardware or software downloads. This enables businesses to quickly adapt to changes, such as new partnerships or increased product demand.
- Cost-effectiveness: All hardware and maintenance costs are included in the monthly SaaS subscription fee, ensuring you only pay for what you need. Plus, you get instant access to the latest vendor-developed features and enhancements.
- Mobility: Cloud-native platforms allow access from any device, anywhere, provided there is a good internet connection and the correct security access. This facilitates efficient mobile work, like downloading documents or making deals on the go, ultimately enabling insurance on the move.
- Security: True cloud-native platforms come equipped with robust cybersecurity measures, ensuring full compliance with data privacy legislation across all jurisdictions. The risk of losing client data or being hacked is significantly reduced, as exemplified by Salesforce, which incorporates security into every layer of its platform.
An example of this is Novidea’s insurance platform, a cloud-native platform built on Salesforce’s platform in 2017. This significant endeavour required time, focus, extensive resources, specialist expertise, and comprehensive knowledge of the insurance market.
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