Financial Services Firms Prioritize Investing More on Private cloud

Financial Services Firms Prioritize Investing More on Private cloud

Most financial services organizations plan to upsurge their private cloud investments in this digital era

In this digital era, enterprises are increasingly switching to cloud infrastructure and advanced technology as a part of their IT modernization programs. Indeed, there has been an increased use of mobile and wireless devices, which is most likely to drive global data security growth.

As a result, businesses across industries are gearing up their digital transformation, investing more in the private cloud – especially the financial services organizations. Nutanix has recently published its findings for the financial services industry on how firms are planning to adopt private, public, and hybrid clouds.

The study reveals the never-like digital transformation journey in the sector. More than 50% of the respondents saying the pandemic has caused them to level-up their investment into the hybrid cloud. Considering the five-year outlook, hybrid cloud is the primary IT model indicating positive growth among the financial and FinTech companies.

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With this trend, this initiative is expected to grow by 39% by 2025. Moreover, nearly 43% of financial services firms plan to increase their investment into the private cloud over the next year. This is about 10% higher than the global average of 33% – highlighting that private cloud adoption is essential to creating a modern hybrid cloud strategy.

Some principle highlights from the study are –

  • Security concerns influence private cloud adoption – The financial services organizations ranked privacy, security, and compliance challenges as the most concerning – while running applications in the public cloud solutions (62%).

The professionals are less concerned with public cloud capacity (30%), indicating that when the public cloud has the abilities to support IT infrastructures, the security of sensitive information, data is non-negotiable. Thus, companies are looking forward to alternative solutions.

  • More investment in hyper-converged infrastructure – This demonstrates the confidence of financial organizations in a private cloud. Almost 50% of financial sector professionals noted that they have fully deployed HCI or are in the process of doing it. Even some 38% of respondents reported they would deploy HCI within the next one to two years.

This outlay is directly aligned with the augmented private cloud adoption since HCI reduces the time it takes to build a software-defined, scalable infrastructure – which is necessary to support the private cloud infrastructure.

  • Financial services companies are looking to optimize cloud usage – The industry’s top motivations for modernizing the IT infrastructure is to gain better control of IT resource usage (59%) and gain speed (58%). Besides, there is also the flexibility needed to meet business requirements, reported 55%.

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  • The marketplace needs to invest in talent – In order to support a hybrid cloud environment, nearly 36% of the respondents reported they were short on skills and knowledge required to manage any mixed private or public cloud environments. Another 34% of the professionals said they lacked proficiency in cloud-native technologies and containers, such as Kubernetes.

Such challenges have contributed to organizational issues to adopt a hybrid cloud fully. Factually, major financial services companies have explored public cloud offerings while neutralizing legacy datacenters.

In this context, Tapan Mehta, Director of Industries Solution Marketing at Nutanix, explains in the company blog post – “However, as the industry continues to place greater interest in data privacy and compliance issues, organizations are turning to the private cloud. This rapid increase in private cloud adoption serves as the basis for a hybrid cloud model, which is expected to become the industry norm over the next few years.”

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