Financial services

The Case for Cloud Adoption in Financial Services Grows Stronger

Public cloud adoption is still relatively new among European insurers, but that is likely to change. One of the main areas of growth for cloud adoption in insurance is in underwriting and pricing, where greater use of artificial intelligence (AI) to make decisions means greater power of treatment is necessary.

Drivers of Cloud Adoption in Financial Services

There are several primary drivers for moving financial services operations to the cloud.

On the one hand, there is increasing pressure on financial institutions to bring new services online – this demand has only been exacerbated by the pandemic.

Cloud solutions also enable financial institutions to make strategic use of data as they help break down data silos and allow financial institutions to have a more complete view of the end customer. Operating in the cloud also provides the computing power needed to generate more frequent and accurate insights. Established financial institutions have huge lakes of data, but struggle to use them strategically if data is locked in silos.

We have also seen the emergence of open Application Programming Interfaces (APIs) in Europe and beyond: APIs foster interconnection between banks and third-party solution providers, prompting banks to adjust their underlying architecture to make it more customizable. and scalable.

Financial services companies are also increasingly challenged on the need to be resilient, to withstand shocks such as the pandemic and to ensure “always on” availability.

Benefits perceived by financial institutions

Financial institutions see several other benefits they can derive from moving to cloud-based solutions. Flexibility and scalability are two examples.

Financial institutions use AI and machine learning solutions as part of data processing and generating customer insights. Given the scale of data held by established financial institutions, this type of business can quickly eat up the capacity of an on-premises data center, whereas the cloud offers a more flexible solution.

Additionally, the volume of transactional data can be unpredictable, which makes the flexibility the cloud can provide attractive.