Banks stumbling over hurdles as they race to embrace cloud technology
Worries about overseeing risk and concerns over security breaches are among the hurdles preventing banks from taking up cloud technology as quickly as other firms, according to a study released today.
The report by law firm Pinsent Masons and the British Bankers' Association (BBA) highlights how lenders could become more agile and reduce their costs by using cloud technologies, which are relatively commonplace outside the industry and banks risk being left behind if they cannot adapt quickly.
The report also argues cloud technology could enable banks to help certain consumers access financial products, better use data to make decisions and create new investment products.
Read more: The UK’s crackdown on encryption threatens London’s fintech boom
"Innovation teams within banks know that a confident cloud adoption strategy is the only way forward and essential to the future of competing effectively in financial services," said Luke Scanlon, head of fintech propositions at Pinsent Masons. "Banks must put their customers in control, before fintech companies as well as the technology giants take away significant market share."
The researchers are now calling on banks, cloud service providers, regulators and policy makers to work closely together to smooth the path for firms looking to adopt cloud computing.
Read more: Societe Generale income inches down in 2016, but retail banking booms
Scanlon added a more harmonised regulatory framework was needed for banks and the cloud, commenting: "This requires more clarity around what data and which banking functions can be supported by cloud-based technology, how effective oversight of complex cloud supply chains can be achieved, how the regulator can best achieve its own oversight objectives and how best to prepare for, in future, banks transitioning from one cloud service provider to another."
Meanwhile, the BBA has formed a Cloud Working Group to help its members navigate any legal, regulatory and commercial challenges in adopting the technology.