Research has found that 86% of finance companies say that a lack of ability to migrate legacy apps to the cloud is impacting their business negatively, despite 85% viewing digital transformation as a key priority[1].
Finance sector feels negative impact of cloud migration
The inability to migrate legacy apps is resulting in backups and patches taking too much time for over a third (36%) of the companies surveyed and a further 33% say they are not making efficient decisions with their IT.
The research, conducted by Sapio on behalf of CSI, also found that some resistance remains about moving apps to the cloud due to perceived security concerns.
It found 36% of IT managers in the financial sector cited security issues associated with the cloud as a barrier to change, whilst 31% cited unclear guidance from the FCA regarding security governance. Worryingly, 55% of those surveyed said they have only adequate security practices in place but could do more.
Almost two-fifths of the finance companies surveyed find lack of direct connections to issuing and acquiring banks, payment systems and converging services halting them from moving their customer experience forwards, followed by an inability to bypass public or unreliable connections.
“The volume of regulations and legislation is a common theme in the financial services sector, meaning many companies wrongly shy away from the cloud,” explains Simon Payne, CEO, CSI.
“Whilst handing responsibility over to a third party (rather than keeping it on-premise) involves great trust, cloud systems are proven to offer a far more stringent way of managing security and compliance. The cloud gives access to AI-based cybersecurity and machine learning algorithms that are effective at upholding data protection standards.
“With so many businesses also citing difficulties when it comes to migrating legacy apps it’s clear that the financial sector has a long way to go to take advantage of the digital age.There is a fundamental misconception that legacy apps can’t be migrated to the cloud which isn’t true.
We now have the capability to update old code; thus, business critical applications that were previously “uncloudifiable” can be taken to the cloud and then on to public clouds if desired,” says Payne.
Running applications in the cloud allows an organisation to create value faster, take advantage of newer and more powerful technology and deliver consistent and compliant workloads all the while keeping the focus on its business objectives. But CSI estimates that up to 80% of critical core workloads still run on-premise, locking them out from the advantages of the cloud.
“The digital age promises vast opportunities, providing major productivity gains in the way that businesses operate, and cloud adoption is a vital part of the digital transformation journey. Despite perceptions, the main risk here isn’t to do with security and compliance, but with innovation opportunities being stunted and businesses falling behind the curve when workloads remain solely on closed systems,” concludes Payne.
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