Cloud in financial services

In the UK, the ONS reports around 36 per cent of workers across all industries working either entirely remotely or in a hybrid as of April 2021. Recent Accenture research finds about a quarter of finance professionals want to work remotely going forward while several studies show this to be a growing trend and one that will likely persist well beyond the pandemic.

The pandemic has also accelerated the rate of cloud adoption among financial institutions, large and small. Today, the pace and degree of adoption varies based on key factors such as geography, segment of the financial industry, age of institution, as well as other, idiosyncratic factors.

Last year, Reply published a report that brought together the lessons learned from 1,000 cloud projects and a survey of over 100 financial institutions to understand the current landscape of cloud in financial services.

The survey identified on-demand scalability as the main benefit of cloud adoption. 29 per cent of survey respondents cited it as the most important benefit and 60 per cent of respondents had it in their top three. Other benefits that were cited included enabling innovation, cost savings and cyber resilience. However, despite the many benefits, strategic challenges remain for institutions contemplating a move to the cloud.

Firstly, there is no ?one size fits all? approach. Financial institutions need to consider carefully which of the cloud-based deployment and service models best suits their needs. Financial institutions also need to consider the ?why, what and how? of cloud adoption to maximise its benefits. The conclusions in the paper highlight the importance of careful consideration around cloud architecture. They also highlight how an adaptive cloud governance framework, one that is reviewed on a regular basis, is key to successful adoption.

Secondly, the extent of the impacts cannot be underestimated. It is important that the C-suite of financial institutions understand the organisational and technological challenges within cloud adoption. For example, firms need to ensure that the right people with the right skills are in place to facilitate an effective transition. In addition to identifying and recruiting the right expertise, a clear strategy and plan for cloud implementation will help ensure organisational readiness.  

Thirdly, there is a need for firms to adapt conventional methods of cyber security to a cloud computing world. Regulatory compliance also remains a considerable challenge for transitioning institutions, as a robust regulatory framework is slow to harmonise with the current state and pace of adoption.

In summary, institutions need to be strategic in their approach to transitioning in order to maximise the benefits. The cloud transition is not an ?end state?. Financial institutions need to continually review and revise their adoption decisions to ensure that as technology evolves, today's choices remain appropriate and adaptable to a dynamic future.