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Three reasons banks are adopting hybrid cloud

April 17, 2017

If banks are reticent to fully embrace the power of hybrid cloud, they may be missing out on getting closer to customers and outpacing competition.

The IBM Institute for Business Value report, “Tailoring Hybrid Cloud for Banking,” reveals the three top reasons banks are adopting hybrid cloud — and why bankers think they’re important:

1. Hybrid cloud could help banks cut costs

Reducing the total cost of technology ownership is the most popular reason for implementing hybrid cloud. Hybrid clouds can cut costs by taking advantage of the economies of scale that cloud data centers provide. Data centers offer lower costs for hardware, power, facility upkeep and infrastructure staffing. Instead of locking up funds in soon-to-be outmoded capital equipment, cash generated from business success can be reinvested directly into near-term profit growth.

87% of outperforming banks surveyed indicated they are using hybrid cloud to reduce operational costs.

2. Hybrid cloud could help banks improve operational efficiency

Forty-seven percent of bankers cited operational efficiency as a top reason for implementing hybrid cloud. Cloud enables banks to quickly provision resources across an entire ecosystem to rapidly assemble tailor-made solutions for critical business needs. This can greatly reduce time spent on problem solving while enhancing the agility of banks in responding to constantly shifting market demands.  In the realm of IT, cloud enables operational efficiencies by optimizing the latest infrastructure, middleware and apps. This enables banks to leave subpar legacy systems behind. For example, during online financial transaction processing, banks can plug in the latest third-party cloud-based API service to verify user identity.

3. Hybrid cloud could help banks boost innovation

Cloud adoption fosters innovation because it can transcend barriers of geography, industry, and organization. Cloud accelerates innovation by enabling quick prototyping of new ideas for fast experimentation. Remarkably, at least 75 percent of bankers surveyed said their most successful cloud initiatives had already achieved expansion into new industries, creation of new revenue streams, and expansion of their product/services portfolio.

47% of banking executives surveyed said they are using cloud to drive more innovation.

Clearly, cloud has evolved from a technological platform to an integral part of banking transformation.

To get started with hybrid cloud, banking leaders can ask three key questions:

  • How would you articulate your bank’s cloud strategy?
  • What new benefits can your bank attain by more thoroughly embracing hybrid cloud?
  • What are the logical steps to start accelerating your hybrid cloud adoption today?

For more findings on how hybrid cloud can address a bank’s unique needs, consider reading the full report.


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Meet the author

Lynn Kesterson-Townes
Global Cloud & Quantum Leader, IBM Institute for Business Value, Global Business Services



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