A leading technology company is pushing into financial services to grow its cloud business. Could this provide upside to the stock?
What Happened: Microsoft Corporation MSFT is releasing its Microsoft Cloud for financial services on Nov. 1.
“We are releasing new capabilities to help enable retail banks to enhance customer and employee experiences as well as drive loyalty and customer growth,” Microsoft Vice President of Financial Services Bill Borden said.
The company said the move will help accelerate innovation for its sustainable growth. Virgin Money UK was announced as one of the first partnered institutions on the new launch.
“Financial services organizations have increased focus on how to accelerate their digital agendas to better serve their clients and empower employees, while at the same time continuing to reduce the costs of running their businesses,” according to Microsoft.
The increased focus has led to a “strong emphasis” on cloud technologies and services to save on time and costs.
“Our customers have been clear that they need cloud services tailored to their specific needs and challenges.”
The Microsoft financial cloud product's features include enhanced customer and employee experiences, customer onboarding, financial crime defense with account and purchase protection, security and compliance.
Why It’s Important: Microsoft will highlight more features of the new financial services offering at a digital forum on Oct. 26.
Microsoft’s cloud business has been one of the most important items for the company’s growth and likely for the rise in its share price.
Intelligent cloud segment revenue was $17.4 billion in the fourth quarter, up 30% year-over-year.
“Our commercial cloud revenue grew 36% year-over-year to $19.5 billion,” Microsoft CFO Amy Hood said in the earnings report.
CEO Satya Nadella highlighted the company’s commercial cloud in prepared remarks, saying it was helping meet its customers’ needs.
MSFT Price Action: Microsoft shares were trading 1.1% higher at $291.95 Wednesday afternoon.
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