Tuesday, November 8, 2011

Gartner Explain the Future of Cloud Banking

It has been seen that more and more Financial Services providers will be using cloud computing in the years to come. This is according to the new research by Gartner, an independent analyst body, that says a rapid shift is occurring in the banking industry.

It is during the Gartner Symposium/ITxpo 2011 where the said research will be discussed. It will happen on November 7 to 10 in Barcelona.

According to Peter Redshaw, managing vice president at Gartner, cloud computing “should be innovative, dedicated to this industry, and transformative”.

The research further revealed that global FS CIOs consider the cloud as a top priority. Furthermore, a good 39% of the respondents believe that more than half of all their transactions will be supported by the cloud infrastructure and software.

Some 44% of FS CIOs in Europe, Middle East, and Africa (EMEA) are also expecting the same thing. That is that more than half of their transactions will be supported by cloud computing by the year 2015. It also added that 33% are hopeful that majority of the transactions of their companies will be processed thru SaaS by the year 2015.

“Early cloud adoption, especially in the FS sectors, may have been limited to non-core areas and proofs of concept, but it is set to go mainstream, moving the heart of the business, transaction origination and processing, into the cloud,” Peter Redshaw said.

“Cloud banking has the ability to drive ‘creative destruction. As well as helping to improve or optimise an existing service or process, cloud banking can provide the wealth – or the freedom – to try completely new services and processes, such as reverse auctions and third-party core banking systems, maybe even running them in parallel. Successful new cloud services can displace the existing and dominant process for design, distribution or transacting in a disruptive way, rather than just incrementally improving them,” he added.

Cloud banking is seen to be able to deploy the “champion-challenger model” in an economical and feasible way. This is also considered as the most attractive benefit of cloud banking. With this, banks will be replacing people progressively in the value chain with algorithmic operations (AO) for processes and decision-making; however, the intellectual property resides in these said algorithms.

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