Economist: Cloud adoption in banking accelerates
The latest Temenos report, in partnership with the Economist Intelligence Unit, highlights how banking providers are starting to invest in a multi-cloud strategy - with over 80% of respondents agreeing it will become a regulatory prerequisite for banks.
The report finds the adoption of software as a service (SaaS) and cloud infrastructure has accelerated since the pandemic. Despite banks generally being slower to take to cloud computing than other sectors, over 30% of IT executives saying they are incorporating AI multi-cloud technologies into established banks to fend off the threat from fintech’s and challenger banks, who have used the cloud to advance quickly into new market opportunities.
Unsurprisingly, cost is the biggest driver of cloud adoption (43%), followed by the adoption of AI (34%) and improving customer experience (21%). Business agility, elasticity and scalability were considered top drivers by 40% of respondents.
The report ‘Capturing value in the cloud’ finds cloud infrastructure has accelerated since the start of the pandemic, with banks seizing an opportunity to cut costs and ramp up their digital transformation projects. 82% of banking IT executives say they now have a clear strategy for adopting cloud.
Banks are tapping into the cloud to speed up their ability to gain insights from data, and in turn to be able to innovate faster. Barriers still stand in the way of a wholehearted embrace of the cloud; including security, privacy, compliance and governance concerns. These challenges are leading firms to invest in both technology and talent.
Andrew Reeves, Head of Cloud, Temenos, said:
“The pandemic has clearly lit a fuse under cloud adoption with banks having to deliver and scale digital services rapidly. However, cloud is also a prerequisite for success in the world of open banking and Banking as a Service. These are megatrends, powered and enabled by the cloud, that are shaping the future of banking.”
You can read the ‘Capturing value in the cloud’ report here.
About Temenos
Temenos AG is the world’s leader in banking software. Over 3,000 banks across the globe, including 41 of the top 50 banks, rely on Temenos to process both the daily transactions and client interactions of more than 1.2 billion banking customers. Temenos offers cloud-native, cloud-agnostic and AI-driven front office, core banking, payments and fund administration software enabling banks to deliver frictionless, omnichannel customer experiences and gain operational excellence. Temenos software is proven to enable its top-performing clients to achieve cost-income ratios of 26.8% half the industry average and returns on equity of 29%, three times the industry average. These clients also invest 51% of their IT budget on growth and innovation versus maintenance, which is double the industry average, proving the banks’ IT investment is adding tangible value to their business.
About Economist Business Intelligence Unit
The EBI is the research and analysis division of The Economist Group, the sister company to The Economist newspaper. Created in 1946, they have over 70 years’ experience in helping businesses, financial firms and governments to navigate the ever-changing global landscape. Their global team of economists, industry specialists, policy analysts and consultants works tirelessly to produce the highest quality data, research and analysis on everything from national elections and international trade, to food security and sustainable cities.
