“Most financial services companies must adhere to strict regulatory requirements and government mandates. Not surprisingly, 60% of respondents called out security as the single biggest influence on future cloud strategies,” says enterprise cloud computing company Nutanix which has published its second Enterprise Cloud Index report.
According to the report, because so many organisations struggle to migrate workloads between environments, financial services companies have the highest percentage of traditional data centres (59%) delivering key applications.
“Yet, in the face of digital transformation, the sector faces mounting pressure to modernise IT and to make services more convenient for end-users. Together, this explains why nearly 18% of financial companies have deployed hybrid cloud today, while 51% plan to shift investment to hybrid cloud in just three to five years,” the report notes.
“As Australia’s financial industry adapts to the aftermath of the Royal Commission, pressure from fintechs and bank disruptors and increasing regulation requirements, the time to innovate is now,” said Neville Vincent, VP South Asia Pacific, Nutanix.
“We’re seeing greater appetite among our A/NZ financial services customers to leverage hybrid cloud to end up on the right side of that and stay competitive in a changing industry. But it’s also helping those organisations gain, or often regain, control of their IT investment and their data while remaining secure and compliant.
“The greater need for IT capability and support at remote or branch offices shows us how important the edge is for financial institutions. Cloud decisions need to factor in the rapidly accelerating amounts of data coming through these edge locations, particularly in a large but widely dispersed region like A/NZ.”
Nutanix lists additional findings of this year’s report including:
- Flexibility to move applications as needed is critical. Nearly three-quarters of financial companies surveyed (71%) shared their plans to move one or more applications running in a public cloud back on-premises. In the financial services industry, regulatory requirements are constantly evolving, meaning companies must keep pace with changing regulations that govern where these companies can store and manage their data. Respondents also ranked hybrid cloud as the most secure IT operating model (27% of the time), signalling the importance of flexibility, alongside security, in this ever changing environment.
- The future of work and digital transformation plays a role in the financial sector’s infrastructure decisions. Financial services selected “support for remote/branch office users” as a motivator for cloud decisions nearly 30% of the time, a significantly higher percentage than cross-industry averages, pointing to the increasingly remote workplace landscape and the role of digital transformation in customer experience. In the short term, respondents listed lack of adoption stemming from concerns around nascent tools for managing hybrid environments (66%), a lack of hybrid cloud skills (30%) and a lack of cloud-native development skills (23%).
- Security is paramount for compliance and regulation. Data showed that financial companies are running the highest percentage of data centres today, with just over 59% of financial companies. Accounting in part for this trend is dissatisfaction with public cloud, with only 39% of financial services companies reporting public cloud services were completely meeting their expectations.