Why Financial Services Firms Are Struggling To Succeed With Cloud Computing

Trending 2 months ago

Only 40% of banks and little than half of insurers afloat achieved their expected outcomes from ... [+] migrating to cloud.


Mention ‘cloud’ and nan responses from financial services executives will tally nan gamut. While immoderate will happily database nan galore benefits of a cloud-enabled business, others mightiness still beryllium figuring retired really to get maximum worth from their unreality initiatives. Recent investigation by Accenture ACN connected cloud outcomes recovered that only 40% of banks and little than half of insurers afloat achieved their expected outcomes from migrating to cloud.

Cost savings, successful particular, person proved elusive, pinch nan investigation revealing that only 1 successful 3 banks and superior markets firms reporting that their expectations person been afloat met. There’s small uncertainty that, arsenic a consequence of this, reliable discussions are taking spot successful nan C-suites and boardrooms of financial services firms astir nan world.

From nan very earliest days of cloud, nan business lawsuit was intriguing but counter-intuitive. On nan 1 hand, it made consciousness to switch an costly on-premise infrastructure pinch a hosting work that gave you elastic capacity connected a pay-per-use basis, arsenic good arsenic unprecedented efficiency, agility and innovation. Especially if you were assured that readiness and information information were astatine slightest arsenic coagulated arsenic connected your ain infrastructure, and that regulators acknowledged nan fact.

On nan different hand, it ever felt unusual moving nan information and applications that are captious to nan business disconnected nan premises and onto personification else’s servers, and putting up pinch sizeable inconvenience while nan migration was underway.

Because of this trepidation, astir financial companies preferred to consciousness their measurement incrementally onto nan unreality alternatively than embark connected a decisive, holistic journey. Although banks almost doubled their reliance connected nan unreality betwixt 2021 and 2022, this still amounted to an mean of only 15% of their full workloads.

No 1 tin conflict that it’s difficult to move halfway systems disconnected nan mainframe and into nan cloud. So it’s nary astonishment that nan easier, little risky projects were tackled first … and connected their own. Although nan enabling furniture and protocols were put successful spot for nan statement arsenic a whole, nan migration of workloads seldom happened wrong a coordinated, enterprise-wide initiative. Where we are coming is that nan low-hanging consequence person been harvested and, for galore financial services executives, nan output has been disappointing.

Which raises nan question: Were these executives inspired by nan wide imaginable of cloud, but fto down by a tentative attack that could ne'er recognize that afloat potential? In different words, was location a value to salary for fragmenting a broad migration and prolonging nan process? It’s surely existent that nan longer you return to move your workloads across, nan longer you must salary for 2 sets of infrastructure alternatively than one—and that will decidedly put a dent successful your finances.

This conclusion was supported by a caller study Accenture performed for a ample banking client, which included benchmarking against its awesome competitors. The study recovered that nan worth of accelerating nan bank’s nationalist unreality migration was $10 cardinal a year, mostly done unlocking nascent AI capabilities and freeing up information for nan precocious study needed to amended customer acquisition and cross-selling.

Eight retired of 10 banking executives expect to person astatine slightest 20% of their information successful nan unreality this twelvemonth and unreality remains 1 of nan apical spending priorities for banks. Will these executives beryllium disappointed pinch nan results, aliases will they study capable from their early piecemeal efforts to move things around?

A batch is riding connected this. As financial services firms contend pinch rising disruption and mounting threats, nan expertise to respond and innovate astatine gait takes connected heightened importance. This, together pinch a big of different priorities for illustration improving customer interactions, capitalizing connected AI for competitory advantage and processing new, dependable gross streams—not to mention transforming nan organization—cannot beryllium achieved without a beardown cloud-enabled integer core.

These caller unreality capabilities will person a profound effect connected companies’ expertise to adapt, innovate and grow. While executives should support a adjacent oculus connected nan costs savings that unreality migration delivers, these savings are apt to beryllium dwarfed by nan financial returns arsenic they go much responsive, applicable and competitive.