Paris, November 14, 2024 – A recent Capgemini survey points to a yawning gap in the financial sector as legacy banks and insurance firms find it hard to leverage and realize the benefits of their cloud spend.
Despite steady progress, only about four out of ten executives believe their cloud engagements have lived up to expectations. Such concerns as scaling challenges, managing data resources, and cybersecurity come into play.
The report shows that while traditional institutions use the cloud primarily to drive operational efficiency, fintechs, and insurtechs aim to boost sales by disrupting the market through the cloud.
High scalability costs, complex pricing models, and ineffective governance are some of the key roadblocks that affect the Cloud R.O. I in the perspective of the Capgemini research institute’s World Cloud Report for financial services 2025.
In fact, only 12% of financial institutions qualify as so-called cloud innovators, which means they utilize cloud-native technologies to further their top-line growth.
A clarion call from Ravi Khokhar, global head of cloud for financial services at Capgemini, argues
“Cloud should be adopted not merely as a cost-saving strategy but rather as an enabler to drive the business forward.”
Fintech institutions however view the cloud as part of a bigger ambition integration of AI and robotic process automation, but 71 pc of industry executives agree that legacy, regulation, and data protection remain the most critical barriers.
“Upstart innovators work differently as their cloud redefines the business of clouds. Established businesses only see clouds as cost reduction and nothing more,” said Khokhar.
The report also illustrates how in Europe the upcoming Digital Operational Resilience Act (DORA) would bring an increase and escalation in compliance requirements and this is likely to happen globally too moving forward.
The answer to the problem as per Ocwen is financial services organizations will have to adopt a cloud-first approach, have an emphasis on interactive elements, and improve their AI functionality.
As the adoption of the cloud progresses, the report recommends companies using the cloud for data-focused innovation would, more likely than not, succeed over time in the competitive landscape.
What is your reaction?
