Cloud usage in the financial sector: how the industry benefits from cloud computing

Cloud computing has long been a standard instrument of technological change in most companies. This also applies to the financial sector. Compared to other industries, however, the financial industry was initially more sceptical and reserved when it came to the use of cloud technologies. Among other things, this was due to the fact that the industry is heavily regulated and has to comply with many regulations when using new technologies. For example, when it comes to protecting the sensitive data and financial information of their customers.

Our study „Cloud Monitor 2023: Financial Services“ shows, however, that scepticism in the industry has decreased significantly. In the last two years, the share of cloud-first strategies among financial services providers has increased sharply. Not only that, but the financial market is expected to catch up with the overall market in terms of cloud computing maturity and usage over the next few years. For our Cloud Monitor, we surveyed more than 500 companies, 100 of them from the financial services industry.

Around two-thirds of respondents are pursuing a cloud-first strategy (63 per cent). By comparison, cloud-first strategies were much less common in 2021, at 44 per cent. The financial service providers see advantages in cloud use for the entire value chain in the company. Particularly computationally intensive business areas such as finance or risk management and control benefit. In the cloud, for example, simulations for liquidity management or risk modelling can be carried out with high performance. Cloud computing also has a positive effect on overall bank management. Even in corporate areas such as compliance and data protection, which are usually seen as obstacles to the cloud, cloud technology offers added value, for example for controlling money laundering or for know-your-customer processes. In addition, more and more companies are turning to cloud solutions for payment transactions or for credit applications and processing.

Another reason for the increase in cloud users in the financial industry is security. Our survey shows that 61 per cent of the companies surveyed that use DevOps and DevSecOps methods have been able to increase security in the company. DevOps and DevSecOps methods are technologies that combine development and IT operations and also integrate the topic of security. Security aspects are thus integrated earlier in the software development process and continuously monitored and developed during operation. 

Security aspects and more protection against cyberattacks are among the most important topics for respondents in connection with cloud use. The spread of cyber attacks is increasing and offers such as ChatGPT are paving new ways for cyber criminals to generate hard-to-identify phishing emails or ransomware codes. Even if cloud solutions have proven to be more stable and resilient compared to classic on-premise applications, it is still important to be able to withstand cyberattacks. To do this, the cloud applications should always be up to date.