Financial institutions deploying cloud technology to boost profitability

Financial services firms plan to increase their investment in cloud technology over the next two years, citing business growth and revenue prospects, according to a new financial services study conducted by Capco and Wipro FullStride Cloud Services.

Research, “Cloud Transformation of Financial Services”, found that 62% of financial services leaders believe that the deployment of cloud technology will increase future revenue, and 52% believe that it will increase profitability in the future.

In 2021, banks ’cloud spending averaged $ 36 million, rising to $ 41 million for capital markets companies and $ 55 million for insurance companies.

The report shows that firms run an average of 38% of their business applications through the cloud, and that percentage is expected to increase to 55% in two years.

It also emphasizes that the pandemic has increased the willingness of institutions to make cloud investments in 49% of banks, 52% of companies in the capital market and 45% of insurers.

Additional points in the report: Financial services institutions have begun their journey to full digital deployment in the cloud and expect to move forward to realize this vision.

The main challenges that arise when implementing cloud technologies include deciding on the best technology options, uncertainty about return on investment and usage options, and a lack of strategy and roadmap for the entire enterprise.

Over the next two years, financial services leaders expect to make their most significant cloud investments in product development / research and development (62%), cybersecurity (48%) and business development and sales (42%).

Last year, a survey conducted by banking software provider Temenos found that seven out of 10 bank IT executives incorporate cloud technology into products to help them achieve their business priorities, with cost reductions being a major driver of cloud technology adoption.

Peter Kennedy, Capco’s partner and lead cloud division, comments: “We believe that financial services firms often do not take total costs into account when measuring return on investment (ROI) in the cloud. Only 40% cite the benefits of lower non-IT costs, and even fewer measures reduce carbon emissions, reduce time to market or increase productivity. ”

“Roadmaps that chartered a digital journey for the entire organization have emerged slowly, if at all. At the beginning of the transformation process, it is important to develop an enterprise-wide cloud strategy and roadmap detailing technology choices, management measures and cost priorities, as well as moderate other potential battlefields that could erode implementation. ” Kennedy adds.

The Wipro FullStride Cloud Services survey is based on 1,300 responses in 11 industries, of which 26% are involved in financial services, particularly banking, insurance and capital markets, including consulting and asset management companies.

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