Cloud Banking Set to Go Mainstream

by Mercator Advisory Group 0

A rapid shift in attitude towards cloud banking is happening within the financial services (FS) industry, according to Gartner.

A recent survey of global CIOs conducted by the firm found that 39 percent of financial sector tech heads expect that more than half of all their transactions will be supported via cloud infrastructure and software as a service (SaaS) by 2015.

Peter Redshaw, managing vice president at Gartner, says: “Early cloud adoption, especially in the FS sectors, may have been limited to non-core areas and proofs of concept, but it is set to go mainstream, moving the heart of the business, transaction origination and processing, into the cloud.” Rather than just focussing on incremental cost savings, cloud computing creates the opportunity for banks to try completely new ways of working, says Redshaw, citing examples such as reverse auctions and parallel running of core banking systems.

As SaaS and cloud computing options become more prevalent in a wide variety of business applications, it’s logical to see interest with financial institutions. And as smaller institutions, including community banks and credit unions grapple with how best to incorporate new capabilities into their products sets, such options will become worthy of consideration. This is because these solutions are typically modularized and quicker and easier to deploy. Larger Fis may need to review the landscape in more detail though, because of their inherent large data sets, limited bandwidth, and the need to integrate many disparate systems throughout the enterprise.

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