91% Of Banks & Insurers Have Initiated Their Cloud Journey, Yet Many Are Unable To Realize Full Business Value

Implementing cloud at scale is critical to harvest the full value of AI investments. One-in-two banks and insurers have not moved their core business applications to the cloud.

 

Copyright: capgemini.com – “91% Of Banks & Insurers Have Initiated Their Cloud Journey, Yet Many Are Unable To Realize Full Business Value”

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The inaugural Capgemini Research Institute’s World Cloud Report –Financial Services, published today, reveals 91% of banks and insurance companies have now initiated their cloud journey, a significant increase from 2020, when only 37% of firms had embarked on their cloud transformations. However, this high rate and its corresponding investment does not translate to effective cloud adoption at scale. More than 50% of firms surveyed have only moved a minimal portion of their core business applications to the cloud.

Today, 89% of financial services executives believe that a cloud-enabled platform is crucial for delivering the agility, flexibility, innovation, and productivity necessary to meet escalating business demands. Yet, most firms are still not cloud-native[1] and instead tend to opt for a “lift and shift”[2] approach that hinders the full benefits of cloud-based systems’ scalability and flexibility advantages.

Implementing cloud at scale is critical to harvest full value of AI investments

Nearly two-in-three financial services firms (62%) have started using artificial intelligence (AI), with a target to utilize it across the full value chain in the next two years. Despite their potential, AI, including generative AI and machine learning technologies, are yet to be used at scale in the financial services industry and therefore are having limited impact. The research found that to date much of the cloud investments have been applied towards modern, user-friendly, AI-based, customer-facing applications. Fewer investments are made in back-end core processing systems that are providing inputs to consumer-facing front end applications, resulting in a poor overall user experience.

According to the report, the migration of internal core systems to suitable cloud-enabled ecosystems and platforms is critical to unlock the complete potential and efficiency of AI and generative AI. In return, this will spark the emergence of a wider range of business growth opportunities over the coming years. Today, in banking and insurance, firms are testing their generative AI use cases across customer onboarding, credit analysis, financial planning, policy renewals and to support client servicing models.[…]

Read more: www.capgemini.com

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