Cloud technology is being increasingly adopted across the BFSI sector as modern-day banks and financial institutions are exploring innovative ways to reduce costs and increase operational efficiencies. According to a survey by IBM Corporation (U.S.), in 2020, 91% of financial institutions actively used cloud services. Additionally, the COVID-19 pandemic highlighted the fact that banks could no longer rely on their existing legacy systems to fulfill consumer expectations.
In the financial sector, a large amount of data is generated regarding the customer. Thus, financial institutions have been utilizing cloud computing services, including IaaS, to store the data and manage their operating processes. The migration of their IT infrastructure to the cloud helps to improve customer relationship management and helps to make faster decisions using real-time data analytics. Law firms are also using the IaaS model to reduce costs by automating various processes, such as document management systems (DMS), to store case documents and allow us to use the data on the Internet.
For the BFSI sector, regulatory compliance and operational efficiency improvements are the top priorities for trading and risk technology groups. Thus, banks prefer cloud computing to increase agility and efficiency across banks by offering scalable computational resources such as HPC. According to Google LLC (U.S.), more than 49% of Tier 1 and Tier 2 banks focus on increasing the calculation speed and quality to support complex market risk functions, bank capital, and liquidity requirements.
According to a survey conducted by Google Cloud (a cloud platform developed by Google LLC, U.S.) and The Harris Poll, LLC. (U.S.), 83% of respondents associated with the BFSI sector stated that their companies used cloud services in some capacity. Most BFSI organizations (38%) preferred a hybrid approach, combining the superior security and control of private clouds and the flexibility and scalability of public clouds. Cloud infrastructure is becoming increasingly important in migrating existing IT systems to the cloud to gain actionable insights, drive business growth, and focus on infrastructure and digital banking application modernization. Cloud infrastructure helps reduce hardware installation & maintenance costs and offers cloud services that can be accessed from anywhere. All these benefits are boosting the adoption of the IaaS model in the BFSI sector, driving the growth of this market.
Conclusion
The digital transformation of IT infrastructure to cloud infrastructure is becoming important in the BFSI sector to reduce costs and increase operational efficiencies as a large amount of data is generated in the BFSI sector that requires more space for storage purposes. With migrating existing IT infrastructure, the cloud also provides actionable insights, drives business growth, and focuses on infrastructure and digital banking application modernization. However, regulatory compliance and operational efficiency improvements are the top priorities for the banking and financial institutes; thus, the hybrid cloud is preferred by the BFSI sector. Also, adopting cloud infrastructure helps reduce hardware installation & maintenance costs, boosting the adoption of the IaaS model in the BFSI sector.
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