Over 60% Financial Services Cos expect their Cloud investments to increase revenue in next 2 years: Study

Financial services leaders cite increased future revenues (62%) and improved future profitability (52%) as leading reasons to deploy cloud technologies, according to a Capco (owned by Wipro) report.  

According to the report, the top three ways covid-19 has impacted operations of financial services institutions (FSIs) are — it elevated the prioritisation of cloud as a means to improve customer experience (70% of banks, 63% of capital market firms, 55% of insurers); it enhanced recognition of the importance of cloud usage to making processes more efficient and agile (54% of banks, 67% of capital market firms, 59% of insurers) and it increased institutions’ willingness to make cloud investments (49% of banks, 52% of capital market firms, 45% of insurers).  

FSIs have started their journey toward full digital implementation in the cloud, and anticipate moving forward to realise that vision whereby banks’ cloud spending averaged $36 million in 2021, rising to $41 million for capital markets firms and $55 million for insurance companies. Also, currently firms run, on average, 38% of their business applications through the cloud, and they anticipate that percentage will increase to 55% in two years, the study stated.  

Over the next two years, financial services leaders expect to make their most significant cloud investments in product development/R&D which is upto 62%; cybersecurity upto 48% and; business development and sales upto 42%.  

However, the top three obstacles to cloud implementation listed by FSIs are that banks are finding difficulty in deciding on best the technology options (48%); uncertain return on investments (ROIs) and use cases (45%); and lack of enterprise-wide strategy and roadmap (42%).   

Capital markets firms are struggling with lack of enterprise-wide strategy and roadmap (48%); difficulty in deciding on best technology options (42%); and uncertain ROI and use cases (41%).   

Insurance companies are also struggling with lack of enterprise-wide strategy and roadmap (42%); inadequate IT and data systems (40%); and difficulty in deciding on best technology options (39%).  

The study findings elicit that an average of 25% of FSIs said limited access to cloud skills and talent along with a need for training were serious impediments to successful cloud implementations.