# Financial services industry blazes the trail for cloud migration post-pandemic
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-08-25
Category: TECHNOLOGY
Category URL: https://financedigest.com/category/technology
Meta Title: Financial Services Lead in Cloud Adoption According to IDC
Meta Description: Discover how the financial services sector is embracing cloud technology for innovation, customer experience, and resilience amidst regulatory changes and the
URL: https://financedigest.com/financial-services-industry-blazes-the-trail-for-cloud-migration-post-pandemichtml

![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/network-devices-connected-through-cloud-computingfkvpmkul-sbi-300246519-1-1736837976975-compressed.jpg)

_By_ **_John Clarke,_** _Principal Cloud Advisor, Cloudreach_

![](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/picture15-1736837976952-compressed.jpg)

John Clarke, Principal Cloud Advisor, Cloudreach

Financial services has always been an early adopter of new technology. In the 19th century, for example, banks were quick to make use of [newly-laid transatlantic cables](https://thetchblog.com/2019/10/14/how-a-cable-changed-finance/) to trade bonds, currencies and stocks with unprecedented speed and efficiency. From the 1950s onwards, the arrival of [mainframe computing](https://home.barclays/who-we-are/our-strategy/backing-the-uk/east-midlands/history/) with punch card, paper tape and magnetic tape I/O systems, similarly proved fitting to the industry’s needs by digitising potentially thousands of lines of customer, transaction and capital data at huge scale.

The natural affinity between the financial sector and IT is best demonstrated today by the industry’s rapid adoption of [cloud computing](https://www.financedigest.com/how-hybrid-cloud-computing-offers-the-best-of-all-worlds.html "How hybrid cloud computing offers the best of all worlds"). According to research conducted by IDC and Cloudreach, over 70% of [financial services](https://www.financedigest.com/can-financial-services-brands-ever-be-credible-on-social.html "Can financial services brands ever be credible on social? ") organisations have either recently migrated or are in the process of migrating to the cloud, showing a clear lead over the manufacturing (65%), media & entertainment (60%), retail (44%), and transport & logistics (44%) sectors.

## An inflection point in the adoption of technology in the financial services industry

The pandemic has been a significant catalyst in [pushing all industries](https://www.financedigest.com/eu-recovers-appetite-for-trade-in-green-industry-push.html "EU recovers appetite for trade in green industry push") to the cloud. Nowhere has this been more true than in the [financial services](https://www.financedigest.com/as-hackers-declare-cyberwarfare-financial-services-cannot-afford-to-be-complacent.html "As hackers declare cyberwarfare, financial services cannot afford to be complacent") sector. According to the survey, 82% of respondents in the [financial services](https://www.financedigest.com/what-can-we-learn-from-financial-services-security.html "What can we Learn from Financial Services Security?") industry cited the pandemic and an increase in remote working as a trigger for moving to the cloud, significantly higher than the cross-industry average of 65%.

But why did the pandemic have such an [impact on cloud adoption in the financial services](https://www.financedigest.com/trends-in-the-financial-service-landscape-and-the-impact-on-fraud.html "Trends in the financial service landscape and the impact on fraud") industry? The explanation lies in the accompanying events that respondents identified: 74% cited regulatory changes (e.g. GDPR, Schrems II) and 66% said the [need to improve](https://www.financedigest.com/what-needs-to-happen-to-improve-the-landscape-for-smes-trying-to-access-finance-options-in-the-uk.html "What needs to happen to improve the landscape for SMEs trying to access finance options in the UK") security, both of which are markedly higher results than the cross-industry averages (58% and 49% respectively).

To enable staff to work from home and allow customers to access products and services remotely, all while meeting high-level security and regulatory requirements, accelerating cloud adoption was a no-brainer for [financial services](https://www.financedigest.com/how-big-data-is-sending-shockwaves-through-the-financial-services-sector.html "How big data is sending shockwaves through the financial services sector") organisations. But aside from simply solving existing problems, the [cloud has also brought significant benefits](https://www.financedigest.com/the-benefits-of-adopting-cloud-technology-in-the-finance-industry.html "The benefits of adopting cloud technology in the finance industry").

## What are financial services companies achieving?

When it comes to the [benefits financial services](https://www.financedigest.com/how-crowdsourcing-can-help-drive-the-benefits-of-advanced-analytics-in-financial-services.html "HOW CROWDSOURCING CAN HELP DRIVE THE BENEFITS OF ADVANCED ANALYTICS IN FINANCIAL SERVICES") organisations are realising as a result of adopting cloud, the results speak for themselves. According to the IDC study quoted above, on a scale from 1 (no impact) to 5 (significant impact), the areas where financial services have felt the most empowered to innovate after moving to the cloud are: user customer experience (3.82), operating model (3.79) and the overall ecosystem of [supply and value chains](https://www.financedigest.com/5-steps-to-successful-supply-chain-finance.html "5 Steps to successful supply chain finance") (3.45). In addition, organisations also report being more prepared to address economic recession (4.11), data privacy (3.74) and business continuity (3.71).

The results also demonstrate that organisations within the sector are using the cloud as a solid foundation on which [future digital](https://www.financedigest.com/smarter-safer-stronger-cybersecurity-is-now-critical-to-digital-future.html "Smarter, safer, stronger cybersecurity is now critical to digital future") initiatives can be built. The most commonly cited among these were: enabling the use of sensors enhanced with advanced and predictive analytics for better decision-making (92%), improving collaboration across internal functions (84%), and creating more resilient [supply and value chains](https://www.financedigest.com/g7-finance-leaders-pledge-financial-stability-supply-chain-diversity.html "G7 finance leaders pledge financial stability, supply chain diversity") (79%)

## Advice for those embarking on a cloud migration journey

The past 18 months have shown how unpredictable the world can be and how abruptly the [status quo can change](https://www.financedigest.com/pelosi-praises-taiwan-says-asian-trip-wasnt-to-change-status-quo.html "Pelosi praises Taiwan, says Asian trip wasn’t to change status quo"). From a broader perspective, therefore, the ultimate goal that [organisations should have in mind when moving to the cloud](https://www.financedigest.com/embracing-cloud-computing-how-and-why-organisations-are-set-to-invest-more-in-cloud-computing-in-2023.html "Embracing Cloud Computing: How and why organisations are set to invest more in cloud computing in 2023") is to become future-ready.

What does it mean to become future ready? It means having the agility to enact massive change without causing major disruption. It means opening up new efficiencies to achieve more while using fewer resources. Crucially, it means having your sights set on completing digital transformation, a stage at which 29% of [financial services](https://www.financedigest.com/boom-or-bust-how-the-financial-services-sector-is-coping.html " Boom or Bust: how the financial services sector is coping") organisations report they have reached, significantly more than the 21% cross-industry average.

Based on what the most successful [financial services](https://www.financedigest.com/how-green-are-your-investments-why-esg-data-integration-is-key-for-financial-services-firms.html "“How green are your investments?” – Why ESG data integration is key for financial services firms") organisations are doing, here are some key initiatives that help make the most of digital transformation:

### \#1 – Automate migration processes

AI/ML algorithms can remove the burden of mapping out dependencies within an organisation’s core infrastructure, while also finding opportunities to modernise the cloud estate. In so doing, [financial services](https://www.financedigest.com/4-ways-high-performance-analytics-powers-financial-services.html "4 ways high-performance analytics powers financial services") organisations can leverage native could technologies and architectures to reduce costs and drive efficiencies in application development and operation. This will significantly accelerate the [speed at which enterprises can plan](https://www.financedigest.com/vw-to-speed-up-electric-shift-in-five-year-plan.html "VW to speed up electric shift in five-year plan"), launch and continuously track their cloud modernisation strategies.

### \#2 – Leverage the power of DevOps

Practices such as continuous integration/continuous delivery (CI/CD), which are part and parcel of DevOps, help bridge the gap between development and operation activities, further increasing speed and agility. Organisations can also take advantage of DevOps as a Service solutions, which make this expertise accessible via a simple and flexible monthly subscription, rather than [spending money](https://www.financedigest.com/student-finances-exposed-how-do-they-really-spend-their-money.html "Student finances exposed: How do they really spend their money?") hiring hard-to-find DevOps talent.

### \#3 Experiment easily and safely

Creating a solid foundation for your [cloud migration is essential for innovating securely](https://www.financedigest.com/cloud-security-and-the-department-of-go.html "Cloud security and the ‘department of go’") and effectively. With correct skills, governance framework and technical design, your business can obtain new capabilities and begin experimenting. Inputting guardrails to enable governed experimentation while swapping out legacy technology and delivering new applications is one way of doing this. Many businesses also [build and manage their cloud](https://www.financedigest.com/reckon-one-builds-momentum-with-strong-backing-from-accountants-joining-the-cloud-advisor-programme.html "Reckon One builds momentum with strong backing from accountants joining the Cloud Advisor Programme") governance by developing a Cloud Center of Excellence (CCoE). This is a central unit of pioneers who are responsible for encouraging change across the [business and incubating best practises related to cloud](https://www.financedigest.com/how-cloud-computing-saves-businesses-money.html "How cloud computing saves businesses money") architecture. Their focus is on urging cloud use while minimizing risk and costs.

## A model for all industries to follow

Whether it’s improving customer experience, meeting regulatory and security requirements, or being the first to adopt innovative new technologies, the [financial services industry](https://www.financedigest.com/73-of-employees-in-the-banking-and-financial-services-industries-are-looking-for-better-physical-and-mental-wellbeing-support-in-the-workplace.html "73% of employees in the banking and financial services industries are looking for better physical and mental wellbeing support in the workplace") is blazing a trail when it comes to using cloud computing to realise digital transformation.

As the results quoted above demonstrate, [cloud migration](https://www.financedigest.com/a-cloud-migration-guide-for-financial-institutions.html "A Cloud Migration Guide for Financial Institutions") is not simply a matter of addressing specific issues – it’s the next logical step for all industries in both realising and being ready for the future. The ability to experiment and innovate with new solutions via the [cloud and deliver higher value](https://www.financedigest.com/the-value-of-cloud-computing.html "The Value of Cloud Computing") services to customers is an imperative, not an aspiration.

But like telegraph cables and mainframe computers before, the [cloud is the latest in a long line of transformative technological](https://www.financedigest.com/7-ways-cloud-technology-can-transform-business-finances.html "7 ways cloud technology can transform business finances") innovations. And today its benefits and potential applications are now even more evident as businesses look to rebuild after the pandemic. It’s increasingly clear that the [financial industry](https://www.financedigest.com/matching-digital-adoption-with-cybersecurity-in-the-financial-services-industry.html "Matching digital adoption with cybersecurity in the financial services industry") is doing what it’s always done – adapting quickly with the times. Other sectors would do well to follow or face a battle for survival.


---
This blog is powered by Superblog. Visit https://superblog.ai to know more.
---