1. Capex optimization
The cloud helps to reduce fixed IT costs required for hardware devices and allows companies to easily expand their business operations. The pay-as-you-go model provides improved flexibility and eliminates the need for significant up-front capex, particularly those associated with delivering new solutions, as well as overall operating charges, enabling a shift from it being a capex to an operational expense.
Our survey reveals that in the next two years, the cloud, on average, will enable an annual cost-saving of US$21.14m related to capex. This is further expected to rise to US$45.43m in the next five years. These savings allow businesses to reinvest in other parts of the business and accelerate growth.
2. Scalability
Gradually, cost has become a less important factor as the cloud’s other business benefits have emerged. These include infinite scalability, lower barriers to experiment, improved customer retention, security and business resiliency. Adopting cloud solutions allow financial services companies to be right-sized, i.e., scale up or down on demand, with cloud services being able to expand and contract as needed almost immediately. This provides a much better way to manage costs in line with user and business demands.
3. Speed to market
The cloud enables developers to adopt a fail-fast approach to build and test new products and applications, and bring them to the market quickly. Conducting analytics in the cloud is also one of the emerging driving factors, since it enhances business intelligence, strategic planning and targeted marketing. The financial services companies that were surveyed reported that technologies such as artificial intelligence (AI) and/or machine learning (ML) (30%), data (20%) and advanced analytics (20%), distributed ledger (15%) and blockchain (10%) would also enable their move to the cloud in the next 12 months.
Although multiple benefits are associated with cloud-first strategies, several financial services companies are hesitant to move all their IT and business systems to the cloud. The risks and challenges to cloud adoption vary — from data security concerns to lack of IT systems and related change management components as well as lack of expertise and skilled resources.
To address these concerns and challenges, it is imperative for financial services enterprises to assess their existing IT landscape and build security models that are appropriate for the architecture being implemented.
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