The inaugural Capgemini Research Institute’s World Cloud Report – Financial Services has been published.
According to the report, 91% of banks and insurance companies have now initiated their cloud journey, an increase from 2020 when 37% of firms had embarked on their cloud transformations. From what it’s understood, over 50% of firms surveyed have moved a minimal portion of their business applications to the cloud. Today, 89% of financial services executives seemingly believe that a cloud-enabled platform is crucial for delivering the agility, flexibility, innovation, and productivity necessary to meet business demands. It’s believed that nearly two-in-three financial services firms (62%) have started using artificial intelligence (AI), with a target to utilise it across the full value chain in the next two years.
Based on the report’s data, considerably 95% of firms now are factoring ESG impact into investment decisions, the cloud is also considered to have a role in aiding the industry’s management of ESG reporting to help achieve their sustainability goals. Reportedly, it can equip them with ESG impact measurement tools, as seen by 51% of financial services firms citing improved transparency and reporting measures. Interestingly, cloud providers are starting to develop solutions that can track and report scope 1, 2 and 3 level emissions, offering visibility into a firm’s carbon footprint across business functions and products. In wealth management, over half (60%) cited benefits in relying on cloud-enabled fraud detection techniques to make data-driven risk-management decisions. Likewise, over one-third of retail banking executives (39%) emphasised transitioning credit risk management to the cloud to shorten loan processing decision time, through cloud-enabled automated processes and integrated analytics. Among life insurance executives, customer relationship management (55%) has stood out as the highest priority for their cloud journey.
Moreover, two-thirds (68%) identified data security as a barrier to adopting cloud solutions, while 51% pointed to high operational and transformation costs as potential obstacles. An additional 45% mentioned regulations, such as data sovereignty, as another factor that may pose challenges. On that note, 39% of executives reported a preference to leverage public cloud, 49% preferred private cloud, and the remaining 12% thought hybrid cloud is the best option.
“For today’s financial services organisation, I believe ignoring the cloud is not an option. Moving to the cloud requires looking beyond a cost-savings approach and being centred around driving innovation to gain a competitive edge. As companies race to adapt and implement generative AI, they should be mindful that there will be no future AI benefits to be realised without cloud-enabled systems. By defining and establishing a cloud target operating model at scale, the full potential of these transformational new technologies can be harnessed,” Ravi Khokhar, global head of cloud for financial services, Capgemini, said.
