Business Model Innovation in Cloud Financial Services

A 2021 joint report by and Imperial College Business School saw the participation of over 100 financial institutions from across the EU and the UK, such as Unicredit, PayPal, BNP Paribas, the European Investment Bank, and MeDirect Bank, Malta.

This report provided a unique and expert insight into how the cloud is set to transform financial services, particularly as we continue to progress in the shadow of a global pandemic. 

The age of cloud computing has long been anticipated, and it has steadily become a core component of businesses across multiple industries. Being a global platform on which every new digital business is built upon, our colleagues at Reply are fully aware of the implications that this has on the financial sector.

Freddy Gielen, Executive Partner at Reply and co-author of this study, argues how cloud adoption had already started in some financial sectors, but the pandemic brought with it a necessary acceleration of these processes to meet the sudden shift in workforce and client realities. For Gielen, “successful cloud adoption requires profound organisational change, [and] it is as much about people as it is about technology.

The integration of cloud agnostic software development has always been part of MeDirect’s overall strategy and aim to become a technology leader in the financial sector. 

According to our Chief Technology Officer, Chris Portelli, this cloud-based innovation will allow MeDirect to “hyper-scale and to take advantage of all the benefits of cloud providers, allowing for the future growth of MeDirect without any potential limitations”. 

The Cloud and Digital Transformation

Cloud-based technologies have been in use by some financial institutions since before their appeal skyrocketed once the pandemic set in. Huw Van Steenis, Group Managing Director and Senior Advisor to the CEO at UBS Switzerland, argues how the cloud was already mature and resilient enough to become commercially viable.

The key with such forms of digital transformation is to make them appealing to both traditional and new financial institutions. Despite this, there is a sort of general consensus in the industry that these technologies foment the necessary advancement that can lead to a digital environment that goes beyond banking – a form of ecosystem that fosters innovation. 

This is also stated by Hans van der Waal, Global IT Director at Travelex, who refers to cloud technology as the “most important driver behind digital transformation”. Not only can it allow institutions to scale cloud native components down to their individual business models, but if done correctly it can improve business agility and data driven decision making. 

Furthermore, the cloud offers a unique sense of flexibility as it is quite easy to launch a couple of test pilots. And this is an important factor for any financial institution that is eyeing changes that will reverberate across multiple layers of the business. Head of Cloud Services at HSBC, Ian Haynes, explains that in order to achieve adequate digital transformation and meaningful projects at scale, “you need to take all the stakeholder groups on a journey with you, including the business, the technology organisation, the executive leadership, the bank’s risk stewards, and our regulators.”

And this is precisely how MeDirect has leveraged the cloud to drive innovation to its business model.

Approaches to Innovation on the Cloud

This study has identified four main ways in which firms engage with innovation on the cloud. The most popular approach appears to be developing and running software on the cloud while ensuring that the applications can be run natively. This is followed by respondents who develop software on the cloud that can only be run on the cloud.

The third most popular approach is the one where firms only use the cloud to innovate in other ways beyond simply developing applications. And finally, the least prominent approach used by firms involves using the cloud to speed up the development and testing of software that would then be run natively. 

No matter the approach, the key for financial institutions to achieving innovation on the cloud is to experiment – and this should be done to scale and in a cost-effective manner. These test ideas are useful tools for banks and other types of institutions to increase process efficiency and to reduce operational infrastructure costs. 

Such experiments are pretty commonplace in the physical business world, but the most impressive tests actually occur in the digital sphere. Companies such as Google and Apple will run thousands of experiments each month to consistently fine tune their products and services. 

Achieving Business Model Innovation

But what is possible for giants such as Google may not always be the case for a comparatively smaller institution such as MeDirect – or is it? Over two years ago, our company undertook a cloud first transformation programme to reinvent our business model. 

This has always been our vision, to think about customer value through the lens of a cloud-enabled business. Our aim was to give our clients control over their own investments by becoming their primary destination for personal online financial management. 

Through cloud-based technologies and the flexibility of scalable testing, MeDirect achieved the necessary business innovation that spanned most units and teams, and also saw a radical shift in how our company operates, generates customer value and drives innovation. This has allowed MeDirect Tech capabilities to advance to the point where they are now on par with those of leading fintech operators. 


When compared to other businesses, financial services have always seemed to lag behind in terms of digital innovation and transformation. As our economies continue to shift to the digital sphere, financial institutions must be aware of how existing and emerging competitors are reacting to market changes and disruptions by hyper-scalers.

Such disruptions will continue to drive and accelerate transformation and innovation. We fully expect the cloud to become a fundamental enabler of this disruption, so it is imperative that MeDirect continues to position itself ahead of the game and at the forefront of cloud-based financial services. 


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