A recent report by Capgemini reveals considerable dissatisfaction with cloud services among financial services firms, with fewer than 40% of executives expressing high levels of satisfaction regarding the outcomes.
The research, which surveyed 600 executives and 120 fintech and insurtech companies across 13 countries, indicates that many organizations are struggling to harness the full value of cloud technology. Operational challenges are significantly affecting C-level decision-makers and hindering the return on investments in cloud transformation.
Specifically, the findings show that less than 40% of executives are highly satisfied with their cloud solutions in various areas, including reduced operational costs (33%), enhanced scalability (27%), accelerated innovation (26%), advanced data analytics (24%), and improved security and compliance (21%).
The report underscores several obstacles financial institutions encounter, including a prevalent lift-and-shift strategy for cloud migration, rapid scaling that unexpectedly raises costs, complex pricing models, and ineffective governance and management practices.
Ravi Khokhar, the global head of cloud for financial services at Capgemini, notes: “Our research clearly indicates that while technology is recognized as foundational by financial institutions, many still treat cloud merely as a cost-saving initiative. In contrast, innovative disruptors are using it to profoundly transform their operations.”
Additionally, three primary concerns were spotlighted by industry executives: integration with legacy systems, data security issues, and suboptimal data quality. The report further reveals that 81% of executives believe the absence of suitable technology hampers their business objectives. Most respondents identified artificial intelligence (81%), predictive analytics (75%), and robotic process automation (65%) as critical to supporting a cloud ecosystem. However, traditional financial institutions struggle with the maturity and expertise required for these technologies, with only 15% demonstrating capability maturity in AI, 30% in predictive analytics, and 22% in robotic process automation.
For organizations that successfully rise to these challenges, the potential rewards are substantial, including increased revenue from upselling and cross-selling, opportunities for data monetization, and enhanced product development.
Khokhar concludes: “Adopting a cloud-native approach to cultivate a culture of innovation will enable banks and insurers to better deliver new products and services, explore new markets, and enhance customer satisfaction. With generative AI now a focal point in boardroom discussions, a robust cloud-based technology foundation will also position the industry to maximize investments in new technologies on a larger scale.”