Almost half (47%) of banking IT executives told The Economist Intelligence Unit that incorporating the cloud into their organization’s products and services will help them achieve their business priorities “to a great extent,” while 72% indicated the cloud will help them achieve their business priorities in some way. Mercator predicted cloud’s penetration of financial institutions in our 2021 Outlook. This year we identified cloud and six other issues that will drive major changes in the payments market in the years ahead:
“Cost is the biggest driver of cloud adoption (43%), followed by the adoption of AI (34%) and improving customer experience (21%). Business agility, elasticity and scalability are together cited by 40% of respondents as top drivers.
The report ‘Capturing value in the cloud’ finds banks have generally been slower to take to cloud computing than other sectors. But the adoption of software as a service (SaaS) and cloud infrastructure has accelerated since the start of the pandemic, as banks seize an opportunity to cut costs and ramp up their digital transformation projects, with 82% of banking IT executives saying they now have a clear strategy for adopting cloud. This comes as established banks figure out how to use incumbency to fend off fintechs and challenger banks, while the newer entrants use the cloud to advance quickly into new market opportunities.
According to the report, banks are tapping into the cloud to speed up their ability to gain insights from data, and in turn to be able to innovate faster. Yet barriers stand in the way of a wholehearted embrace of the cloud—including security, privacy, compliance and governance concerns. These challenges are leading firms to invest in both technology and talent.”
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group