The finance and insurance industry has indeed driven digitalisation in recent years and successfully introduced digital processes and technologies. However, many companies are still in the process of integrating digitalisation into their business strategy and modernising their IT infrastructures. This is shown by our study "Cloud Transformation in the Finance and Insurance Sector“. For this, we surveyed executives and professionals, especially with a technical profile, from the sector and can now provide information on what progress has been made in the implementation of cloud services and where companies still need to catch up.
Faster and more flexible processes thanks to the cloud
A core element of the digitalisation strategy is the migration of workloads to the public cloud, for example, in order to be able to develop processes more quickly and flexibly. Other arguments in favour of cloud adoption are cost savings and IT security. Above all, employees from traditional insurance companies see the most important advantage of public cloud computing in being able to adapt IT resources as needed. They see this as a starting point for adapting services and technologies to their own needs.
As in many other industries, cloud computing continues to be one of the big trends in banking and insurance and has already become the cornerstone of digital transformation in many institutions. As high data protection and security standards apply in the financial industry, most companies rely on a mix of legacy, on-premise, private and public cloud structures. Many public cloud providers have now responded to the increased demand from the financial sector and offer cloud services that are adapted to the high security requirements of financial and insurance institutions.
Companies have not yet outsourced many processes to the cloud
Our survey does show that many companies have already integrated cloud services into their processes. On the other hand, a majority of respondents, 71 percent, have moved less than half of their workload to the public cloud. This is especially true for traditional companies. The reason given is mostly a high migration effort. Those we surveyed plan to increase the share of their workloads in the cloud in the coming years.
When it comes to using the cloud, security concerns play a major role in the finance and insurance industry. Many respondents are concerned about the loss of their own data. Legal hurdles also represent a challenge for almost half of the respondents (44 percent) when it comes to cloud transformation. The protection of sensitive customer data plays a particularly important role for the industry. The regulations to prevent possible data misuse are exceptionally strict compared to the rest of the industry, and a loss of trust on the part of customers in the event of damage is particularly serious.
Partner, Financial Services
KPMG AG Wirtschaftsprüfungsgesellschaft
Partner, Head of Technology & Finance Consulting, Financial Services
KPMG AG Wirtschaftsprüfungsgesellschaft
Those who do not know the cloud underestimate the challenges
The survey also shows that especially companies whose cloud transformation is not yet so far advanced underestimate the tasks ahead. Companies that already have a large part of their workload in the cloud more often see hurdles to sustainable implementation than do employees from companies with significantly less transferred workload.
Companies in the finance and insurance sector are increasingly confronted with growing challenges and changing market requirements. Customers expect constant accessibility across all channels, individual service offers and the simple, digital processing of financial services. At the same time, new platform-based business models are developing, additional competitors are entering the market and digital online banks or insurance companies are benefiting more and more from a direct interaction interface with their clientele. Traditional IT architectures can no longer meet these requirements. For this reason, cloud technologies have also become the cornerstone of the digital transformation in the banking and insurance sector. The question is no longer whether, but how companies use the cloud.
About the study
The study „Cloud Transformation in the Finance and Insurance Sector“ was designed and conducted by the research and analyst firm techconsult on behalf of KPMG. A total of 200 employees from German financial and insurance institutions were surveyed. Among the respondents are executives, but also IT professionals and employees responsible for app and software development.
The financial industry is increasingly entering the cloud with the aim of achieving increased flexibility and agility.
The financial sector is entering the cloud with the aim of achieving increased flexibility