Vanson Bourne has conducted research on behalf of Nutanix, surveying 1,700 IT decision-makers around the world. The focus was on cloud deployment and planning trends in the financial services industry, based on the responses of 250 IT professionals in banks and insurance companies across the globe. We take a look at an example of a financial services organisation which has experienced record growth since working with Temenos, the cloud banking platform.
Nutanix, a leader in hybrid multi-cloud computing, announced the financial services findings of its global 2022 Enterprise Cloud Index (ECI) survey and research report, which measures enterprise progress with cloud adoption in the industry. The research showed that fewer financial services organisations have adopted multi-cloud than any other industry surveyed, trailing the global average by 10%. However, adoption is expected to nearly double from 26% to 56% in the next three years, in line with the global trend of evolving to a multi-cloud IT infrastructure that spans a mix of private and public clouds.
Among financial services ECI respondents, 31% are still operating non-cloud-enabled three-tier data centres as their only IT infrastructure. They also reported having the lowest deployment of all industries surveyed in public cloud usage, with 59% using no public cloud services compared to 47% globally, likely due to substantial existing legacy investments in applications and the highly regulated nature of the industry. The complexity of managing across cloud borders remains a major challenge for financial services organisations, with 84% of respondents agreeing that success requires simpler management across multi-cloud infrastructures and 50% citing security concerns as a challenge to the multi-cloud model. To address top challenges related to security, interoperability and data integration, 82% agree that a hybrid multi-cloud model – an IT operating model with multiple clouds both private and public with interoperability between – is ideal.
“While the financial services industry appears to be in the early phases of deployment, the evolution to an interoperable multi-cloud IT infrastructure that spans a mix of private and public clouds is underway,” said Anand Akela, VP of Product and Solutions Marketing at Nutanix. “As information security and operational resiliency remain front and centre for financial services organisations, they must look to hybrid multi-cloud solutions with integrated manageability and security, and the ability to quickly move apps among cloud infrastructures cost-effectively.”
Financial services survey respondents were asked about their current cloud challenges, how they’re running business and mission-critical applications now and where they plan to run them in the future. Respondents were also asked about the impact of the pandemic on recent, current and future IT infrastructure decisions and how IT strategy and priorities may change because of it. Key findings from this year’s report include:
- Financial services organisations face multi-cloud challenges, including security (50%), integrating data across clouds (46%) and performance challenges with network overlays (43%). Given that nearly 78% cited the lack of some IT skills to meet current business demands, simplifying operations is likely to be a key focus in the year ahead. However, IT leaders are realising that there is no one-size-fits-all approach to the cloud, making hybrid multi-cloud ideal according to the majority of respondents (82%). This model will help address some of the key challenges of multi-cloud deployments by providing a unified cloud environment on which security and data governance policies can be applied uniformly.
- Application mobility is top of mind. Nearly all financial services respondents (98%) have moved one or more applications to a new IT environment over the last 12 months, likely from traditional data centres to private clouds given the industry’s relatively low multi-cloud and public cloud penetration. Faster app development (43%) was most often cited as the reason for the move, followed closely by security (42%) and integrating with cloud-native services (40%). Additionally, with a large majority (83%) agreeing that moving applications to a new environment can be time-consuming and costly, it’s expected that the adoption of containers will rise in step with multi-cloud deployments to enable apps to run and move nearly anywhere quickly and easily. Among financial services respondents, 86% said that containers will be important to their organisations within the next year.
- Top financial services IT priorities for the next 12-18 months include improving security posture (54%), improving multi-cloud management (49%) and developing and/or implementing cloud-native technologies (47%). When asked what their organisations had done differently because of the pandemic, 70% said they had increased spending to strengthen their security posture, 64% spent more on increasing AI-based self-service automation and 64% invested in infrastructure upgrades.
An example of a bank achieving record growth as a result of cloud technology is Italian digital bank, Flowe.
The digital bank of Banco Mediolanum revealed it has reached a major milestone with 700,000 accounts in its first 18 months since its launch. With Temenos, the cloud banking platform, Flowe is growing twice as fast as its nearest competitor. It received 150,000 new sign-ups in one week with peaks of 30,000 new customers per day.
Flowe offers digital services at scale, paving the way for future profitability and bringing sustainable banking to over 60 million Italians. Supported by Temenos cloud technology, Flowe is the first bank in Italy to be certified as a B-Corp and become carbon-neutral.
“We chose Temenos Banking Cloud because it enabled us to go live fast, scale massively and provide a seamless onboarding experience to our customers,” said Ivan Mazzoleni, Chief Executive Officer, Flowe. “With Temenos, we’ve been able to bring new products to market quickly and offer truly personalised experiences in line with our sustainable mission. Supported by Temenos Banking Cloud, we can grow sustainably, passing on benefits to customers for a cleaner, greener planet and a better society.”
Max Chuard, Chief Executive Officer, Temenos, said: “Digital innovation in banking is thriving in Italy and it’s an important market for Temenos where we have a strong and growing presence. Banks are ready to break free from the legacy core banking systems that have inhibited innovation, whereas new digital entrants are coming to the market. Flowe’s success shows that Temenos open platform for composable banking can help Italian banks provide highly-differentiated, sustainable banking experiences at scale. Congratulations to the team for demonstrating that a powerful mission combined with leading technology can change the face of banking.”
Cloud adoption has accelerated since the pandemic. A recent Economist Intelligence Unit report supported by Temenos finds that more than seven in 10 banking respondents state that incorporating the cloud into their organisation’s products and services will help them achieve their business priorities. Challenger banks specifically look for agility, scale and easily composable banking services that allow them to assemble best-of-breed providers into an open ecosystem.
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