A new study from IDC Financial Insights indicates that the outlook for cloud computing in the banking industry is positive, and in a few years the migration of many of banks’ data and processes to public and private clouds is set to transform the industry.
Although a few start-up banks are considering wholesale cloud deployments, this IDC Financial Insights study finds that an uncertain regulatory picture still looks likely to hinder the uptake of cloud for banks’ most critical lines of business.
As a relatively new phenomenon, there is still plenty of low hanging fruit for banks to move to the cloud in terms of non-core activities.
But the broader question to be asked is the extent to which the current regulatory environment is chiseling away at the benefits of cloud computing, and the public cloud in particular.
As cloud suppliers reengineer their offerings to address the requirements for auditability, segregation, and security, it seems possible that some of the economies of the pure cloud model are likely to dissipate.
“For Europe as a whole, so long as banks and their technology partners can point out exactly where their data is being stored, and so long as they engage with the regulators from the start of any project, they may expect a positive response from regulators,” said Lawrence Freeborn, senior research analyst, IDC Financial Insights.
“The supervisory authorities in different countries are going through a process of education about cloud computing, just like the rest of the banking industry. Nevertheless, the piecemeal approach to supervision of the industry is unlikely to have actually supported its growth,” Freeborn said.