Banks need a flight plan to navigate the cloud

In brief

• Banks are hitting the accelerator on their journey to cloud. Our survey reveals workloads in the cloud more than doubled from 2021 to 2022.
• The “easy wins” have been achieved and the remaining workloads will be much more challenging to migrate.
• Banks need to make a strong business case for cloud by planning out a flight path that focuses on measurable results for every business unit.
• As new “industry cloud” solutions expand, banks should be able to migrate more quickly without a major increase in resources and investment.

Banks are gaining altitude, but few have a complete flight path mapped out

According to our research—the 2022 Banking Cloud Rotation Index, which follows nearly 100 banks on their journey to cloud—in every area we measure, banks have nearly doubled the percentage of their workloads in the cloud. For core functions, they have more than doubled.

However, the progress they’ve made so far represents only 15% of overall workloads. Banks have a long way to go before their journey to cloud reaches cruising speed—and the tasks ahead of them are more complex than the ones they’ve already accomplished.

Banks face several sources of turbulence on their journey to cloud

Fewer than half of the barriers to cloud adoption that we measure in our survey showed signs of a significant decrease from 2021 to 2022. The top barriers are now legacy infrastructure and the complexity of organizational change—problems that are not easily overcome.

We identified three main issues that banks will need to resolve in order to add more thrust to their journey to cloud:

1. The value of the cloud is being challenged. Some see the migration to cloud as an expensive infrastructure project. Instead, this transition should be led by business value, with technological decisions supporting the business case—not the other way around. With the ROI clearly laid out, banks are more likely to move ahead at speed.
2. Banks struggle with security and compliance. In the tightly regulated banking industry, it’s no surprise security and compliance have slowed the pace of cloud adoption. But, banks that implement security controls early and create a safe environment for the bank’s development community will clear the path to a faster and more secure cloud journey.
3. Hard to monitor complex distributed cloud systems. With off-premises systems, it can be a challenge to effectively monitor processes and identify problems early and precisely. Building in observability throughout cloud-based systems will help avoid downtime and facilitate problem solving.

Three successful flight paths for banks to follow

Banks that are getting the most value from their cloud migration are focusing on key areas where the cloud’s capabilities can make immediate improvements to their bottom line:

1. Distribution. Traditional banking channels are giving way to new distribution models. Banks can use cloud-based technologies to meet their customers where they want to transact, rather than waiting for the customer to come to them.
2. Product innovation. Banks can use new data and analytics capabilities enabled by machine learning and AI in the cloud to deliver innovative and personalized products to their customers.
3. Servicing models. When a bank’s workforce is upskilled to make the most of their new cloud infrastructure, it opens the door to a more productive workplace where automation and real-time data empower staff to do more, and do it better and faster.

Read our report to learn more about the progress banks are making on their journey to cloud. If you'd like to discuss your cloud migration in more detail, contact the Accenture Cloud Crowd.