Banks express dissatisfaction with cloud service returns

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

The research from a survey of 600 executives and 120 fintechs/insurtechs across 13 countries finds that firms face roadblocks in maximizing cloud value as operational challenges continue to influence C-level decision-makers, slowing down the return on cloud transformation initiatives and investment.

Fewer than 40% of executives say they are highly satisfied with their cloud solution’s outcomes broadly, including its ability to provide reduced operational costs (33%), enhanced scalability (27%), accelerated innovation (26%), advanced data and analytics (24%), and improved security and compliance (21%).

The report highlights that challenges arise due to financial institutions taking a lift-and-shift approach to cloud migration, rapid scaling that produces higher-than-anticipated costs, complicated pricing models, and inefficient governance and management practices.

Ravi Khokhar, global head of cloud for financial services at Capgemini, says: “What’s clear from our research is that while the technology is seen by financial institutions as a building block, some firms still consider cloud a cost-saving measure, whereas innovative disruptors leverage it to redefine their operations.”

According to the report, three main concerns were highlighted by the majority of industry executives, including integration with legacy system, data security concerns and lackluster data quality.

The report further highlights that 81% of executives find the lack of appropriate technology impedes their business goals. Most respondents consider artificial intelligence (81%), predictive analytics (75%), and robotic process automation (65%), crucial for supporting a cloud ecosystem. However, traditional financial institutions currently fall short in the maturity and skills needed for these technologies: 15% display capability maturity in AI, 30% show capability maturity in predictive analytics, and 22% exhibit capability maturity in robotic process automation.

For those that do match up to the challenges faced, the rewards are significant, with top line growth in upsell and cross-sell targets, data monetization and product development.

Says Khokhar: “By taking a cloud native approach to foster a culture of innovation, banks and insurers will be better placed to deliver new products and services, enter new markets, and increase customer satisfaction. With generative AI now top of the boardroom agenda, a cloud-based technology foundation can also help the industry maximize investment in new technologies at scale.”