Retail banks and insurance agencies are taking the lead in the use of cloud technology, according to a recent survey conducted by SAP SE and analyst firm Ovum.
IT decision makers at 400 banks and insurance companies throughout North America, Europe, Asia Pacific, the Middle East and Latin America were surveyed in the research.
Software-as-a-Service (SaaS) solutions have become an essential consideration for almost all new IT investment projects, with SaaS now the preferred option for 27 per cent of banks and insurers, with a further 42 per cent considering these solutions for every IT project. In line with these intentions, investment in SaaS solutions is expected to “increase significantly” over the next 18 months for 42 per cent of retail banks and 33 per cent of insurers.
The drive towards the cloud has emerged in response to increasing competitive pressures, tighter regulatory requirements and more sophisticated customers, with financial institutions recognising that the cloud can create efficiencies and protect their competitive positions. 80 per cent of respondents said SaaS solutions enable organisations to respond more rapidly to market opportunities.
“The findings reveal a new maturity for cloud computing in the financial services industry,” said Daniel Mayo, chief analyst of Ovum. “The cloud is now a growth driver for banks and insurers, rather than a medium just for bringing costs down. They are buying SaaS solutions to simplify operations, develop better products and quickly enter new markets.”
Mayo said the industry has made it clear that SaaS will radically change the banking and insurance landscape, particularly with a move towards SaaS supporting a majority of functions within the line of business – as reported by 42 per cent of banks and 36 per cent of insurance companies surveyed.
When it comes to barriers to adoption of SaaS solutions, banks and insurers are seeing as their main obstacles concerns over regulatory compliance (36 per cent), reliability and availability (35 per cent), and the difficult of integrating with existing systems (31 per cent).
