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What’s Driving Financial Firms’ Cloud Futures?

By Kevin Lash

Following the release of Nutanix’s second annual Enterprise Cloud Index report measuring companies' plans to adopt private, public, and hybrid clouds, the team has been analyzing the data further to better understand how trends affect financial firms. The report analyzed more than 500 financial services companies across the globe.

Through this report, Nutaix learned that the financial sector outpaces all other industries in hybrid cloud deployments – hosting workloads in both private and public cloud – but trails others in their use of multiple public cloud services. It is clear that most financial institutions are defining cloud first strategy as a journey to hybrid cloud with 91% saying that this approach is the ideal IT model for organizations. More importantly, 51% of respondents plan to have their hybrid cloud infrastructure inclusive of modernized cloud-enabled datacenters fully implemented in the next 3 to 5 years.

Why is that?

Not surprisingly, 60% of respondents called out security as having the single most significant influence on future cloud strategies. In 2018, the World Economic Forum found that financial crime and fraud was a trillion-dollar industry, and companies spent approximately $8.2 billion on anti-money laundering controls alone in 2017. Security risks and strict government regulations mean that a secure cloud strategy is critical to protecting consumer data. The survey’s data showed respondents ranked hybrid cloud as the most secure IT operating model, offering both the flexibility they want and the control they need. 

Flexibility to move applications is critical. Nearly two-thirds of financial companies surveyed (71%) shared their plans to move one or more applications running in a public cloud back on-premises. Reasons for repatriation most likely include security and compliance, performance, ease of management and cost. With flexibility top of mind, financial organizations are also focusing on modernizing their IT operations, in the datacenter and beyond. In fact, by 2022 financial services companies will run only 18% of workloads in legacy datacenters embrace hybrid IT environments become more prominent. 

The future of work and digital transformation play a key role in the financial sectors’ infrastructure decisions. According to the survey, “support for remote/branch office users” was a motivator for cloud decisions nearly 30% of the time — a significantly higher percentage than cross-industry averages. This illustrates the impact of an increasingly remote workplace landscape and the role of digital transformation in customer experience.

Today, financial organizations recognize the need to think ahead on skills they’ll need to hire for as they undergo various stages of digital transformation. In the short term, respondents listed a lack of hybrid adoption stemming from concerns around nascent tools for managing hybrid environments (66%), a lack of hybrid cloud skills (30%) and a lack of cloud-native development skills (23%). With digital transformation top of mind, the future of financial work will include workers that possess these skills and can help bring their organizations successfully into the hybrid cloud age.

Ambitious plans to shift investment to hybrid cloud demonstrate financial services companies recognize its clear benefits, and we expect to continue to see further adoption of cloud tools that make them more secure, efficient and user-centric than ever.

So, how does your organization stack up against the industry averages? This upcoming expert-led webinar will help you create a point of comparison for your own organization, dive into more detail about crucial findings from the report, and demonstrate how to implement automation and optimization into your own hybrid cloud strategy.

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