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Multi-cloud adoption rising in financial services sector

Written by Tue 10 Sep 2019

But UK financial services firms concerned they lack required IT skills to execute multi-cloud strategies

The majority of financial services institutions are developing a multi-cloud strategy, with 70 percent expecting to have live deployments by 2024, according to a new report from British software company YellowDog.

The company surveyed 200 IT business decision makers from UK and US financial services institutions with over 500 employees about their cloud strategies, finding that 98 percent are using a hybrid strategy and none to be entirely dependent on on-premise infrastructure.

Financial services companies are choosing cloud providers based on insight, data and cost-led approaches, helping challenger clouds like Oracle Cloud and IBM Cloud to challenge AWS, Azure and Google Cloud, the report said.

Some financial industries are more readily embracing cloud than others. Twice as many insurance companies are adopting cloud than banking companies, with one in five insurance companies expecting to be cloud-only by 2021, the report said.

The biggest barriers to multi-cloud adoption are cost (49 percent), time constraints (46 percent) and complexity (46 percent). 29 percent of respondents said they have no need for multi-cloud. Within companies, the C-suite is most frustrated with multi-cloud.

The report also found that UK and US companies have different concerns over multi-cloud. In the UK, IT skills availability is the biggest concern, with C-suite and other decision makers doubting their IT teams’ capabilities. This suggests either the UK financial industry is lacking IT talent or that there is a disconnect between the board and IT professionals working with cloud, the report said.

“Whichever one of the implications proves to be true (and it could be both), the UK’s financial industry needs to better educate decision makers on the potential of the cloud to lower costs and reduce risk – and stress the necessity for hiring the right people to maximise this potential,” reads the report.

By comparison, US companies are most concerned with the risks introduced by multi-cloud, amid increasing pressure on banks to accelerate growth and improve margins.

YellowDog said financial services institutions from both countries should ensure they develop a full and thorough long-term multi-cloud strategy in order to benefit from its potential and to reduce costs. As part of that strategy, the company advises firms to improve the accuracy and reliability of big batch processing.

“A customised data-led multicloud strategy will lead to massive cost savings. It will streamline operations and reduce risk. Ultimately, it will lead to improved decision making in the industry that will drive performance and innovation.”

Multi-cloud refers to a cloud approach made up of more than one cloud service from more than one vendor, whether public or private cloud. The report suggests financial services sector multi-cloud adoption is lagging behind other sectors. According to IBM, 85 percent of organisations already operate in multi-cloud environments.

Written by Tue 10 Sep 2019

Tags:

banking financial services multi-cloud
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