Banks are the biggest lenders in the financial system of any country. With ever-expanding global trade banks’ scope of engagement is now spread across various countries. In its natural course, with every increase in scale and scope, the related risks in lending also increase.
Banking now depends on big data and blockchains to provide a decentralized channel for quicker and safer transactions. As banks have embraced digitization to stay relevant and increase efficiency, traditional safekeeping must give way to safe eVault that ensure unparalleled security features for digital lending.
What is an eVault?
Digital or electronic vault is also known as eVault. In simple terms, it is a vault in the cloud computing systems that allows a user to keep their personal and financial information safe. This feature is turning fast into a commonly used power lending and financial transactions tool that is required for safety requirements.
Why do lending institutions need vaults?
- Security is paramount in the lending business
A lending business involves transactions and this is to the tune of millions and even billions as per the size of a bank. Data integrity must be paramount when an entity is dealing with big-size transactions.
The security of the bank is ensured through encryption, passwords, and tokens so that only rightful persons are authorized with the privilege to access information. However, in a period when all the operations are cloud-centric, and cybersecurity breaches impact the integrity and business of a bank, steps have to be taken to enhance security through reliable means like an eVault.
Lending involves data and applications that have to be preserved and stored in a trusted manner that can be retrieved only through legitimate and authorized means.
Cloud solutions need to be equipped with reliable storage systems that can match the high standards of safety that will not permit unauthorized personnel and hackers to access sensitive information.
This gap can be bridged through eVaults to mitigate the risk of data theft and securely stores and optimizes data backup with differential layers which are accessible through simple browsers.
- Mainframes are rigid
A better technical transformation evolved, banks had to make the difficult decision between moving from their stance of avoiding change as it leads to struggle and adjustment or losing significant market share and customers who were willing to move to other platforms like fintech companies and P2P lenders who processed the loans quickly owing to robust automated software with in-build vaults for higher data security.
When banks started embracing the journey they realized that core banking systems were rigid. Often development led to product silos without integration making the system more complex than earlier systems.
Realizing that breaking the silos and better integration was an important feature for the authentication of data with third-party servers, banks moved to the cloud. At this stage, banks started using agile applications that are feature-rich and help in the efficiency and integrity of the lending business in the form of digital vaults.
Features that should tick in your checklist for an electronic vault provider:
Understandably, the safety and security of data are paramount for banks of every stature irrespective of their scope of operations and size. Contrarily, as the size of the operations and value of the bank increases, the security features of the bank become its core competency and add value to its brand and goodwill value. It becomes an intangible asset based on which the entire mechanism of trust in the relationship of banking business works.
However, several banks and credit unions, specifically mid and small-sized banks, find it hard to zero down on safe digital vaults that will enhance the entity’s security framework. So here is a list of pointers that can help get the basics right:
- Ease of use
Whenever a change has affected a business, the transition has to be easier, and results have to be better to use while maintaining efficiency and security features. So a robust eVault has to be designed with a user interface that is easy to use by both employees and the bank’s consumers. It should not have too many layers for the consumers in terms of difficult-to-run applications that need support from other secondary apps.
- Data importing
The electronic vault should access information from other devices and applications using third-party APIs. Through optical character recognition, the web forms should fill automatically.
The vault should support banking applications from different channels like mobile apps and web browsers without any distinction in the aspect of security.
- Compliant features
The encryption level and features have to be compliant with the standards set by the regulator for banking and lending businesses of all the regions and countries where the bank has operations. These features should always match the acceptable industry and regulatory standards and need embedded security features that cannot be permeated.
Preview before deciding on the eVault provider
Apart from the myriad features that a bank or lender has to check to select the best fit for the eVault service provider, a few steps have to be taken to assess the viability of the new asset in the current set-up:
- Assess requirements
Review the scale of operations and workflow to check if the eVault can be integrated without a major overhaul to the business days.
- Maintenance and training support
Check for maintenance and training support offered by the vendor. A lifetime or annual maintenance terms depending on the scale of operations can be agreed upon. Even the simplest of applications are more effective to use if training is imparted to the employees who will use the feature
Price is a differentiator but one that needs to be assessed after reviewing the opportunity cost of not establishing the feature that is relevant for future growth.
There is a need for urgency in establishing eVaults that deliver operational and cost efficiency for loan originators for different advantages offered by the platform. An eVault offers digital closings and notes that attract and build the consumer’s trust and enhance their banking experience.