Publicis Sapient and Google Cloud did a global survey on 250 senior banking leaders of retail and commercial banks over September and October 2021, revealing these executives’ ambition to triple their banks’ use of cloud by 2025 (see figure below).
However, the report found that a majority of banking executives still undervalued the transformative potential of cloud for their business.
Some executives were also more hesitant about implementing cloud transformation in their banks, due to concerns about cloud security, and a lack of skilled personnel to support their ambition for cloud transformation.
Variation in Existing Cloud Adoption
The survey utilised three categories of banks based on their existing level of cloud adoption: cloud conservatives (at most 10% of applications in cloud), cloud followers (between 11% and 30% of applications in cloud) and cloud leaders (over 30% of applications in cloud).
Regionally, the survey found that banks in the Asia Pacific were more enthusiastic about the potential of cloud-enabled business transformation, as compared to banks in North America, Europe, the Middle East and Africa.
Despite variation in existing cloud adoption among banks, across different regions, most firms still aimed to accelerate their pace of cloud adoption over the next three years. Notably, 44% of banks surveyed aim to shift their cloud investment towards customer-facing applications.
This goal is quite ambitious, since only 11% of banks are currently deploying cloud applications for customer-facing services.
Gap Between Ambition and Execution
However, there is a considerable gap between senior banking leaders’ stated ambition towards greater cloud transformation, and their actual capacity to execute these goals.
Although bank leaders surveyed believe that cloud transformation is important, they do not necessarily understand or realise the full potential of cloud transformation for their companies. Less ambitious bank leaders only saw the IT-cost-lowering benefits of cloud-enabled transformation, and could not appreciate cloud adoption’s long-term business-related benefits.
A majority of bank leaders had limited awareness of cloud transformation’s potential benefits for their firms, especially when compared with their IT and finance teams.
Notably, when bank leaders were asked “Which of the following, if any, are significant obstacles to adopting cloud at your bank?” a majority of bank leaders expressed concerns about data security, difficulties in employing people with the relevant cloud skills, and limited understanding of cloud transformation’s business benefits (see figure below).
Recommendations for Successful Cloud-Based Transformation
Following the findings above, the report gave four recommendations for banking firms to have successful cloud-based transformation.
First, firms should align their cloud-enabled transformation goals with their business needs and initiatives, with a fuller understanding of business-wide benefits beyond IT-cost savings.
Cloud-enabled business transformations should also be supported with enduring capabilities, such as modern engineering principles and tools, agile scaling, upskilled staff, and adoption of data governance beyond the existing company.
Firms also need to modernise their apps, and migrate their digital architecture onto the cloud.
Finally, banking firms should develop and scale enabling platforms which simplify the work of customer-facing engineers.
