Cloud leaders want to transform their businesses with cloud

Target state for cloud-transformed banks

It’s important for financial professionals to keep in mind the dream state for their bank after cloud-based transformation. The ideal cloud-enabled bank will have the following enabled by the cloud:

Customer Focused Products & Services - Enhancing the ability to develop new products and services at speed
Data - Improving quality and use of data (e.g., personalization, pricing, risk assessment)
Automation - Automating and redesigning key processes to reduce operational costs
Partners - Working in an ecosystem model with capability and channel partners
IT - Lowering the cost of managing IT and improving IT resilience

But what do banks today perceive to be the benefits of adopting the cloud?

Q: Which of the following do you consider to be the main benefits to your bank of adopting cloud? (Figure 4)

Figure 4 shows that globally banks perceive the enhanced ability to automate processes (44 percent) as the greatest benefit of cloud, followed by ability to apply advanced analytics (41 percent) and embed partners and develop new products (40 percent).

Looking at regional differences, banks in Asia-Pacific are more enthusiastic about the cloud-enabled business transformation benefits—in particular, the benefit brought by (I) advanced analytics (AI/ML), (II) process automation, (III) new products/services at speed and (IV) embedded partners. By comparison, banks in EMEA perceive more traditional use cases for cloud to be of greater benefit by focusing on the enhanced ability to automate processes being the primary benefit (44 percent).

By region APAC, North America, EMEA
Q: Which of the following do you consider to be the main benefits to your bank of adopting cloud? (Figure 5)

Larger banks are attracted to cloud’s potential to transform their operating and business models. They are looking for benefits from an enhanced ability to apply advanced analytics (AI/ML) and innovation at speed, while focusing less on lowering IT costs. In contrast, smaller banks are attracted to benefits associated with process automation and cost reduction.

By company size based on assets
Q: Which of the following do you consider to be the main benefits to your bank of adopting cloud? (Figure 6)

Cloud is a vital enabler of the wider business transformation

The survey data show that most banks undergoing transformation programs understand the importance of cloud. Among those that plan to transform their bank, over 80 percent say these plans depend on cloud migration “to a significant/moderate extent”, and less than 20 percent think cloud contributes to a limited extent.

Nevertheless, just because an institution understands that something is important doesn’t mean they know why it’s important or how to tap into its transformative potential.

Q: To what extent is cloud vital to the bank’s business and transformation plans? (Just posed to those who say they are seeking to transform their bank) (Figure 7)

Q: To what extent is cloud vital to the bank’s business and transformation plans? (Just posed to those who say they are seeking to transform their bank) (Figure 7)

Figure 8 shows Cloud Leaders place much greater weight on the business benefits of cloud-enabled transformation than Cloud Conservatives. This includes the ability to innovate at speed, apply advanced analytics (including AI/ML), transform operating/business models and embed partners. Cloud Leaders and Cloud Conservatives agree on the benefit in lowering IT costs and increasing automation.

While in relative terms, Cloud Conservatives are much more focused on benefits related to IT cost reductions and increased automation (see Figure 8).

This limited understanding of cloud’s potential stymies growth and transformation. The more advanced banks are in their migration, the more they see the cloud as an enabler of business—rather than technology—transformation.

Q: Which of the following do you consider to be the main benefits to your bank of adopting cloud? Difference between Leaders and Conservatives ranked in order (Figure 8)