Today sees the launch of the second edition of the “Cloud in Financial Services” report, a collaboration between Reply, the European Banking Federation, Insurance Europe, and professors from Imperial College Business School and the University of California, Santa Barbara. This report provides a comprehensive overview of the dynamic cloud adoption landscape in the financial services sector, focusing on key aspects such as cloud strategy, governance, regulation, and data.
Drawing on insights gained from the execution of over 1,200 cloud projects by Reply and interviews with senior industry leaders, the report presents a comparative analysis of transformative changes, challenges, and opportunities in the cloud journeys of financial institutions. Notable findings from a pan-European survey conducted between December 2022 and March 2023, guided by professors from the Imperial College Business School in London, add depth and relevance to the extensive report.
In the realm of business and cloud strategy, the report provides new insights and concrete data on aspects such as costs and flexibility, underscoring the importance of viewing cloud adoption not just as a technological shift, but as a powerful catalyst for achieving new business milestones.
The survey also highlights persistent challenges in regulatory compliance and data sovereignty, with a staggering 81% of respondents still considering regulatory compliance and data sovereignty as substantial challenges (compared to 73% in 2021). Significantly, 34% of respondents identify these concerns as the primary challenge in adopting cloud solutions in their financial institutions.
The survey results in financial institutions also reveal a different perspective on machine learning, despite widespread attention. Notably, 27% confirm that they do not use cloud-based machine learning capabilities, while 34% and 16% report limited and moderate usage, respectively. In contrast, only 10% indicate substantial adoption, and a mere 5% integrate machine learning functionalities extensively. These data offer a revealing comparison between anticipated and actual implementation of cloud-powered machine learning.
Nelson Phillips, Professor of Technology Management at the University of California, Santa Barbara, commented: “The report shows that while cloud adoption has become ‘business as usual’ in financial services, the benefits of moving activity to the cloud vary significantly depending on the approach companies take to cloud implementation and the willingness of companies to look beyond cost savings.”
Freddy Gielen, Executive Partner at Reply, added: “The report and survey demonstrate that the greatest impact of cloud implementation on the profitability of a financial institution is likely driven more by revenue growth than mere cost reduction.”
To delve deeper into the changing landscape of cloud in financial services, download the full report “Cloud in Financial Services”.
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Reply specializes in the design and implementation of solutions based on new communication channels and digital media. As a network of highly specialized companies, Reply defines and develops business models enabled by new AI, big data, cloud computing, digital media, and the Internet of Things.