Only 16% of the financial industry has moved to cloud. Expect that to change

As the country weaved in and out of lockdown over the past year, it was an eye-opener to see how quickly consumers came to expect more from their online interactions. At the beginning of the pandemic, a retail store or restaurant might have been forgiven for not having a robust online ordering process. Still, a year later we all expect the digital experience to be smooth and convenient, whether we order new shoes or renew our mortgages.

As a result, companies and institutions continue to accelerate their digital transformation. A recent study found that 59 per cent of executives have increased the pace of digital transformation and there’s no sign that it will slow down in the next year. Moving business applications to the cloud and making services digitally accessible remains a priority to remain productive in a remote world.

Regulations slow finance industry’s migration to cloud

Financial institutions are among those moving to the cloud, even though the pace is slower. While about 25 per cent of the workload across industries utilizes the cloud, only 16 per cent of the financial industry has moved to the cloud. This slower take-up is largely due to the stringent regulations facing the financial industry. Banking has become layered over the years with inconsistent compliance and governance requirements across all applications, which makes for a very tangled node to untie.

Banks don’t believe they can achieve the regulatory transparency required to meet a public cloud’s security and compliance needs. Public cloud service providers all have different processes for managing compliance and data in the cloud. Issues about roles and responsibilities can be opaque. It can take 12-18 months to develop new applications in various public cloud areas to meet all governance, risk and security requirements.

An industry-specific cloud approach can bring a significant competitive advantage here. A cloud platform in line with the regulatory framework includes integrated security and compliance features so that any third-party application developed for the platform or migrated to the platform meets industry standards. Incorporating industry-based platforms into a company’s hybrid cloud strategy can lead to significant time and cost savings during a digital transformation.

Industrially built cloud infrastructures have huge benefits for many highly regulated industries, such as banking, government and telecommunications, where data protection, regulatory compliance and responsiveness are critical. By incorporating industry clouds as part of a hybrid cloud strategy, companies can accelerate their digital transformation to meet their customers’ needs.

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Jim Love, Chief Content Officer, IT World Canada
Frank Attaie
Frank Attaie
Frank Attaie is General Manager, Technology at IBM Canada, where he leads a team of technical, sales and delivery professionals that are passionate about client success and helping clients transform their businesses with innovative hybrid cloud and AI technologies.

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