Financial Services Set for Significant Cloud Migration

The financial sector is witnessing a significant shift towards cloud computing, as financial services firms seek to reap benefits such as faster time-to-market, breaking down silos, and achieving operational efficiency at lower costs. This trend is driven by growing demand from enterprises due to rapidly evolving customer expectations.

According to market forecasts, the financial cloud market is poised for exponential growth. It is projected to grow at a compound annual growth rate (CAGR) of 24% between 2018 and 2028, reaching a market size of US$52 billion.

One of the key players in this space is IBM, which expanded its IBM Cloud for Financial Services in 2021. The platform, designed in collaboration with Bank of America since 2019, offers advanced quantitative analytics across global markets. IBM also added new ecosystem partners and onboarded additional banks as customers, including Spanish banking group CaixaBank.

IBM's rival, Microsoft, also entered the fray with the general availability of the Microsoft Cloud for Financial Services in November 2021. This industry cloud is designed to meet regulatory requirements and control frameworks specific to the financial sector. It includes new capabilities such as analytics and artificial intelligence (AI) tailored to the financial services industry.

Not to be left behind, Goldman Sachs partnered with Amazon Web Services (AWS) in November 2021 to launch a financial services data analytics and management service, known as the Financial Cloud for Data. This service aims to provide institutions with access to Goldman Sachs' own AI tools and applications.

The migration to cloud computing is not limited to these giants. Data vendors and application providers are moving their products onto popular cloud platforms like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform. This trend is forcing financial services firms to accelerate their adoption of cloud computing to increase scalability and elasticity.

Sanjiv Gossain, Senior Vice President and Global Leader of the Google Cloud Business Group at Cognizant, predicts that the next growth stage for the cloud market will be industry-specific clouds. He notes, however, that the market for cloud computing in the financial sector is still far from mainstream adoption, accounting for only 10% to 15% of enterprise IT spending.

Oracle is another player making strides in the industry. The company announced a significant expansion of its cloud business, aiming to increase cloud infrastructure revenue by 77% and providing AI-powered cloud services, including to financial sector clients like Diebold Nixdorf.

As the financial sector continues to embrace cloud computing, it is expected to revolutionise the way services are delivered, offering superior customer experiences and driving operational efficiency.

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