Despite its recent high visibility, the concept of cloud computing has yet to gain real support among banks, many of which are concerned about security and potential risks of a technology they view as immature. As a result, banks have been slow to adopt cloud computing in a production environment, although bankers accept its potential for cost savings.
These findings result from a survey of business and technical banking executives conducted by independent research firm TechMarketView in conjunction with core banking systems provider Temenos at Temenos’ annual client forum in Monaco this May.
According to the survey, 44% of bank executives see the lack of data security as a significant barrier to the adoption of cloud computing. Reflecting the underlying lack of maturity and confidence in cloud computing, only 15% of respondents are running cloud applications today. The survey showed that 80% of respondents could not name a leader of cloud computing in the banking sector – although Temenos featured among the vendors that were cited by bankers.
Respondents showed a surprisingly good understanding of cloud computing describing it as ‘commodity’ computing resources accessible over the internet at lower cost, with both business and technology executives consistent in their views. Nearly half of the banking executives see cloud computing as means to cut infrastructure costs, while over a third thought it would give more cost flexibility. However, a further one third of executives admitted they simply ‘didn’t know enough’ about the potential risks.
The research comes from the analysis of data collected from business and technical banking executives attending the Temenos Client Forum in May 2009. Half the participants were C-level executives, with the remainder a mix of IT management, project managers, department heads and IT architects. The majority of respondents worked for mid-market banks (assets of between USD10-USD250 billion), the most prevalent (nearly 40%) classing themselves as universal banks.
Koen Van den Brande, Group Strategy and Marketing Director, Temenos and Anthony Miller, Managing Partner, TechMarketView will be available for briefings to discuss the cloud computing trend in banking and the results of the survey.
D.C.