New data from data-driven core banking engine provider, SaaScada, shows that while UK banks increasingly adopt cloud technology to modernise outdated core banking systems, many are realising that not all clouds are created equal.
Many banks are being deceived by ‘cloudwashing’ - a marketing tactic where companies falsely claim that core banking products are ‘cloud-native’ when in reality, they are legacy technologies that have been moved to the cloud.
The survey of 150 UK banking innovation leaders reveals 95% UK banks have migrated - or plan to migrate - core banking workloads to the cloud. The top three drivers for these migrations are scalability and reliability, greater product development control, and cost reduction.
However, many UK banks are missing out on the very benefits they’re seeking - with 57% of banking leaders now “sick of cloudwashing”, saying most so-called ‘cloud’ core banking services are just old tech with a new label.
When asked, ‘Have you ever been a victim of cloudwashing?’, the survey found:
39% of banks admit they have fallen victim to cloudwashing, buying ’cloud’ banking systems with no cloud capabilities.
Meanwhile, 23% say it’s difficult to determine if the core banking product was genuinely cloud-native.
This leaves only 38% who are happy, saying the ‘cloud’ offering aligned with the cloud capabilities as advertised.
“Adopting just any ‘cloud’ core banking system won’t instantly solve your core banking headaches, especially if that core isn’t truly cloud native,” said Nelson Wootton, CEO and Co-Founder, SaaScada. “With cloudwashing obscuring the picture, banking heads must ensure they do their research and don’t fall for the marketing! It’s vital to understand what makes a core system cloud-native: born in the cloud, providing access to real-time data and architectural flexibility to drive innovation.”
SaaScada advises that there are five signs of a truly cloud-native core banking system that companies should bear in mind when investing in cloud native core banking solutions:
Low setup costs
Greater flexibility to design and launch products at the pace of customer demand
No mandatory downtime for service upgrades
Access to real-time customer data
Unlimited scalability.