Fax in 2025: How cloudification is revolutionizing financial services
Digital transformation is causing the financial services industry major problems when it comes to how highly sensitive, time-critical information in transmitted. Adding to these challenges are the radical changes in customer expectations in recent years, as digital communications have taken hold in nearly every aspect of consumers’ lives.
To remain viable, outdated communication structures -- particularly those relying on servers and distributed systems -- need to be consolidated and standardized. Few industries are more prepared for this transformation than financial services, where significant investments are already being made to improve operational efficiencies and competitiveness. As some of the world’s largest financial institutions invest in modern technologies like cloud migration and AI, attention is turning to some of their oldest tools that are still in use. Fax is a prime example.
Fax is Far from Obsolete
Although the technology is old, Fax is still very much a key player in many processes in the financial services industry. It remains a key channel for exchanging sensitive documents, including loan and credit-related paperwork, notarized payment transactions and over-the-counter (OTC) trading. It also offers a traceable, legally binding document transmission in a more secure manner than email thanks to its traceability and legal standing as proof of commercial consent.
The catch is that old-school fax systems just can’t keep up with modern demands. They fall short in terms of speed and reliability, and fail to meet digitalization and compliance requirements in an industry with strict regulatory standards. Maintaining legacy fax systems has become even tougher, with businesses reported to be spending an average of 60-80 percent of their IT budgets on maintaining outdated IT systems.
This doesn’t mean fax is obsolete. In fact, there is a growing need for flexible, affordable digital fax solutions capable of operating in the cloud.
Financial Institutions Embrace Cloud Migration
As financial institutions go digital and move towards paperless operations, they will need to adapt how they use fax to make sure documents can be transmitted securely and seamlessly between applications, thereby ensuring that data stays confidential, and disruptions are kept to a minimum.
To meet both operational and security requirements, many banks are embracing the cloudification of their infrastructure, replacing on-premises fax machines with cloud-based infrastructures that allow financial institutions to securely switch to digital environments while improving processes. This transition typically involves taking a close look at internal workflows and migrating local fax servers to the cloud.
One of the biggest advantages of cloud-based faxing is its flexibility and scalability, which will allow businesses to send, receive, and integrate faxed documents into their workflows regardless of volume. Unlike on-premises fax servers, businesses no longer need to maintain their own fax infrastructure. Cloud fax uses global IP networks to transfer information securely, meaning documents are delivered reliably.
All documents are automatically digitized and can be received as PDFs via email, document management system, or even integrated into CRM, ECM, or ERP systems for automatic processing.
This shift not only makes document management easier but also eliminates the burden of maintaining outdated fax infrastructure. Plus, with transparent usage-based pricing, businesses can cut costs by more than 70 percent compared to traditional fax setups.
Compliance, Security, and Scalability in a Cloud-Driven Future
As financial institutions migrate to the cloud, security and compliance should remain a priority. It’s important that sensitive information is sent in a way that is secure, traceable and fully compliant with current financial regulations and data protection laws. With so many cloud providers on the market, businesses need to choose those that meet the highest data protection and compliance standards to keep sensitive information safe and ensure everything continues running smoothly.
Fax isn’t going anywhere -- its role is just evolving. Cloud-based solutions provide a modern, cost-effective alternative to traditional fax systems, helping reduce operational burdens while at the same time boosting efficiency and security.
Image credit: Nomadsoul1/depositphotos.com
Jens Koch is Head of Product Management Messaging, Retarus.