The cloud imperative for the banking industry
September 29, 2020
RESEARCH REPORT
In brief
In brief
- Banks have been migrating incrementally, and today the average bank has 58 percent of its workloads in the cloud—mostly in private cloud centers.
- Many banking CEOs today believe if they had been more in the public cloud, the last few months would have been a lot easier.
- The cloud will be both transformational and disruptive post-COVID-19, offering banks improved scalability, efficiency, agility and security.
- Cloud maturity is becoming a hallmark of the world’s best-performing banks.
Banking models under pressure for radical change
COVID-19 has given new urgency to the banking cloud imperative. Within a few short weeks the scalability, resilience, flexibility and accessibility of public cloud looked a lot more attractive, as banks sought to manage uncertainty and pivot to a different operating model.
As banking executives assess that potential new landscape, together with the strong performance of the public cloud during the past few months, a typical conclusion is that it’s time to ramp up their banking enterprise cloud strategy.
Arguing the case for cloud in banking
For the cloud evangelists, public cloud was the answer to banks’ quest for secure, personalized and seamless omnichannel customer experiences, powered by internal and external data. It enabled self-service, incorporated the best third-party products, was compliant by design and generated returns that exceed the cost of capital.
But the skeptics weren’t so sure; they cited security concerns, regulatory ambiguity, potential competitive issues with the largest cloud service providers and the seductive economics of fully depreciated data centers. The debate continues, but the evangelists have gradually gained the upper hand: Cloud investment has grown strongly in recent years and is forecast to continue at 15 percent a year between now and 2022.
60%
of our top 20 banking clients have a multi-cloud strategy
15%
are committed to a single-provider strategy
Multi-cloud fits the bill for banks
More than half of our top banking clients have adopted a multi-cloud strategy. We believe that, to an increasing degree, this suits the requirements of most banks. Key benefits include:
Best-of-breed service
Ability to use the right solution for every need.
Autonomy & agility
Freedom for each business and IT unit to use the platform of its choice.
Regulatory compliance
Selection of cloud providers on the basis of banks’ data-residency requirements.
Cost reduction
Ability to leverage the most cost-effective provider at any given time.
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Separating the best from the rest
The pandemic has provided an unexpected opportunity to contrast the performance of cloud-based technology versus legacy technology. Accenture’s experience of helping large banks move their applications to the cloud is that it typically delivers impressive benefits:
10-20%
cut in operational costs
30-50%
shorter time to market
40-50%
quicker provisioning speed
Added to this are the often more important benefits of cost variability, enterprise agility, an enhanced customer experience and support for both compliance and innovation.
We welcome your feedback on this report. Request a meeting and one of our subject-matter experts will contact you to discuss your cloud strategy in more depth.
To learn more about Accenture’s cloud capabilities, read our recent announcement.
Accenture is investing $3 billion over the next three years to enable our clients to rapidly become CLOUD FIRST businesses.
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