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Is cloud the new 'business as usual' in retail banks?

It seems you can't get away from the cloud and all the hype that surrounds it. I was browsing through the Ovum report "The Critical Role for Cloud in the Transformation of Retail Banks", which is based on interviews with 200 CIOs from the global retail banking sector. It suggests that cloud is already widespread in retail banking today, and I found some of the statistics particularly interesting. 

Almost all retail banking IT decision makers interviewed use some cloud technology โ€“ a trend firmly backed up by current IT spend figures. Consider for a moment that in the case of product origination for lending, deposits and checking accounts, 57% of banks say that they use SaaS to support all or the majority of activities. Moreover, 70% report that SaaS is a factor in every software sourcing decision they make, and 42.5% deploy SaaS on a tactical basis. Perhaps most significant is the emergence of a 'cloud first' sourcing model โ€“ for more than a quarter of banks, cloud is the preferred deployment option. 

Trends vary by region, however, so we should be careful not to make sweeping generalisations. For example, you're more likely to choose IaaS/PaaS and SaaS if you're an IT manager in North America than in Asia Pacific (where 42% of respondents reported that cloud is rarely considered). Time doesn't stand still though, and neither do attitudes, so these trends are evolving.

The report confirms that cloud has arrived in retail banking. But is it poised to transform all aspects of it โ€“ from back office to critical systems? Time will tell. And I'll be watching with interest.

The Ovum report, "The Critical Role for Cloud in the Transformation of Retail Banks," can be downloaded here

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Comments: (1)

A Finextra member
A Finextra member 19 November, 2014, 04:42Be the first to give this comment the thumbs up 0 likes

Trends vary by region not only because of attitudes, but also because of technical and legal barriers. E.g. in some African countries, poor internet reliability is an issue severely impairing cloud options. Moreover, in some jurisdictions, laws prohibit or put severe restrictions on customer data being stored outside of the country or outside of the financial institution.