Financial Services Organizations See Major Benefits of Cloud Adoption

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Vanson Bourne conducted research for Nutanix, surveying 1,700 IT decision makers around the world. The focus was on cloud deployment and planning trends in the financial services industry, based on responses from 250 IT professionals from banks and insurance companies around the world. We look at the example of a financial services organization that has experienced record growth since working with Temenos, the cloud banking platform.

Nutanix, a leader in multi-cloud hybrid computing, announced the findings of its global financial services study Enterprise Cloud Index 2022 (ECI) survey and research report, which measures the company’s progress with cloud adoption in the industry. The study showed that fewer financial services organizations have adopted multi-cloud than any other industry surveyed, 10% less than the global average. However, adoption is expected to nearly double from 26% to 56% over the next three years, in line with the global trend towards a multi-cloud computing infrastructure that spans a mix of private and public clouds. .

Among respondents to the financial services CIS, 31% still operate non-cloud-enabled three-tier data centers as their sole IT infrastructure. They also said they have the lowest deployment of any industry surveyed in public cloud usage, with 59% not using any public cloud service compared to 47% globally, likely due to large legacy investments. existing in applications and the highly regulated nature of the industry. The complexity of managing beyond cloud boundaries remains a major challenge for financial services organizations, with 84% of respondents agreeing that success requires easier management across multi-cloud infrastructures and 50% citing security issues. security as a challenge for the multi-cloud model. To address key security, interoperability and data integration challenges, 82% agree that a hybrid multi-cloud model – an IT operating model with multiple private and public clouds with interoperability between them – is ideal.

“While the financial services industry appears to be in the early stages of deployment, the evolution towards an interoperable multi-cloud computing infrastructure that spans a mix of private and public clouds is underway,” said Anand Akela, vice president product and solution marketing at Nutanix. “As information security and operational resilience remain top of mind for financial services organizations, they must look to hybrid multi-cloud solutions with built-in manageability and security, and the ability to quickly move applications between cloud infrastructures in a cost-effective way.”

Respondents to the financial services survey were asked about their current cloud challenges, how they currently run business and mission-critical applications, and where they plan to run them in the future. Respondents were also asked about the impact of the pandemic on recent, current, and future IT infrastructure decisions and how IT strategy and priorities might change because of it. Key findings from this year’s report include:

  • Financial Services Organizations Face Multi-Cloud Challenges, including security (50%), cloud data integration (46%), and performance issues related to network overlays (43%). With nearly 78% citing a lack of certain IT skills to meet current business demands, simplifying operations is likely to be a key focus in the coming year. However, IT leaders are realizing that there is no one-size-fits-all approach to the cloud, which makes hybrid multi-cloud ideal according to the majority of respondents (82%). This model will help address some of the key challenges of multi-cloud deployments by providing a unified cloud environment on which data security and governance policies can be applied uniformly.
  • Application mobility is a priority. Almost all financial services respondents (98%) have moved one or more applications to a new computing environment in the past 12 months, likely from traditional data centers to private clouds, given relatively low multi-cloud penetration and public cloud in the sector. Faster application development (43%) was most often cited as a reason for the move, followed closely by security (42%) and integration with cloud-native services (40%). Additionally, with a large majority (83%) agreeing that moving applications to a new environment can be time-consuming and costly, container adoption is expected to grow as multi-cloud deployments enable applications to run and move nearly anywhere quickly and easily. Among financial services respondents, 86% said containers will be important to their organizations in the next year.
  • Top Financial Services IT Priorities for the Next 12-18 Months include improving security posture (54%), improving multi-cloud management (49%), and developing and/or implementing cloud-native technologies (47%). When asked what their organizations have done differently due to the pandemic, 70% said they have increased spending to strengthen their security posture, 64% have spent more to increase self-service automation based on AI and 64% invested in infrastructure upgrades.

Italian digital bank Flowe is an example of a bank that has achieved record growth using cloud technology.

Banco Mediolanum’s digital bank has revealed that it hit a milestone with 700,000 accounts in its first 18 months since launch. With Temenos, the cloud banking platform, Flowe is growing twice as fast as its nearest competitor. It received 150,000 new registrations in a week with peaks of 30,000 new customers per day.

Flowe offers digital services at scale, paving the way for future profitability and providing sustainable banking services to more than 60 million Italians. Backed by Temenos cloud technology, Flowe is the first bank in Italy to be certified as a B-Corp and become carbon neutral.

“We chose Temenos Banking Cloud because it allowed us to get started quickly, scale massively, and provide a seamless onboarding experience for our customers,” said Ivan Mazzoleni, CEO of Flowe. “With Temenos, we’ve been able to quickly bring new products to market and deliver truly personalized experiences in line with our sustainable mission. Backed by Temenos Banking Cloud, we can grow sustainably, passing the benefits to customers for a cleaner, greener planet and a better society.

Max Chuard, CEO of Temenos, said: “Digital innovation in banking is booming in Italy and it is an important market for Temenos where we have a strong and growing presence. Banks are poised to break free from legacy core banking systems that have hampered innovation, as new digital entrants enter the market. Flowe’s success shows that the Temenos open platform for composable banking can help Italian banks deliver sustainable and highly differentiated banking experiences at scale. Kudos to the team for demonstrating that a powerful mission combined with cutting-edge technology can change the face of banking.

Cloud adoption has accelerated since the pandemic. A recent report from the Economist Intelligence Unit supported by Temenos finds that more than seven out of 10 banks surveyed say that integrating the cloud into their organization’s products and services will help them achieve their business priorities. Challenger Banks are specifically looking for the agility, scale, and easily composable banking services that allow them to bring together the best providers in an open ecosystem.

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