Accenture’s Banking Cloud Altimeter report indicates that 82% of North American Banks have moved enterprise functions, such as finance and accounting software, to the cloud. While it’s a bold move for an industry that was once cloud adverse, cloud adoption hasn’t stopped there.
As technology continues to change and consumers expect more digital functions from their bank, financial institutions are seeking to construct an agile and customer-focused environment. According to Accenture cloud is the answer for 31% of surveyed banks who have migrated 50% of their mainframe workloads to the cloud. However, the mainframe migration isn’t ending with these early front runners as 67% of Accenture’s respondents plan to meet the same milestone within the next five years.
What’s behind the growing acceptance of cloud? It’s a number of factors.
Looking Behind Cloud’s Growing Acceptance
In the cloud’s early days, if a financial institution wanted to take advantage of cloud flexibility, they needed to build their own architecture, platforms and services. For all but the largest banks, it was a cost prohibitive undertaking.
Then came the public cloud. In essence, third party providers began offering shared cloud space, allowing financial institutions to migrate with lower costs. Growing confidence from regulators and proven performance over time have also combined to encourage trust in cloud-based services.
While the emerging wave of core service migrations is an outgrowth of these factors, there is a more potent push behind the shift. In short, it’s a movement whose time has come.
The Digital Banking Report revealed that 86 to 90% of banks, depending on size, rank improving the customer experience as a top three priority.
By moving mainframe services to the cloud, banks are able to respond with more agility to changing market forces as they connect best-for-purpose applications from multiple providers to deliver the best customer experience.
The cloud also allows financial institutions to achieve these goals with less risk and at a far more rapid pace. According to Accenture, 73% of banking executives who responded to their survey expect a rate of return of up to 15% and 76% expect to achieve it within 18 months.
As demonstrated through our own experience, these expectations are well in line with reality. At Mambu, we’ve delivered an 80% reduction in the time it takes to launch new products.
Faster time to launch puts financial institutions on a more rapid and direct route to profitability and cost savings, allowing for a quicker return on investments within a robust and adaptable operating environment.
Find out more about the benefits of cloud and download the infographic below: