Cybersecurity, fraud detection, and claims management are accelerating financial firms move to the cloud

New research commissioned by Snowflake, the Data Cloud company, has found that the worlds’ leading financial firms are increasing their urgency to move towards the cloud in order to strengthen cybersecurity (50.5%), fraud detection (38.6%) and claims management (33.8%). Recent high-profile cyber attacks and financial crime, matched by increased media and regulatory scrutiny, have spurred technology teams to make the right cloud investments to better protect data and maintain high levels of security and governance.

The research emphasises the importance for financial organisations to tackle threats and mitigate rising financial crime with increasing digitalisation of banking and payment systems. Dedicated investment in advanced cloud data analytics will result in increased innovation that enable real-time fraud and anomaly detection, improve customer experiences and quicker response times to sophisticated criminals that possess knowledge of banking processes, controls, and vulnerabilities.

“Ultimately, organisations are looking to achieve improved customer and commercial outcomes with speed to market, all with the highest levels of data security and governance”, said Rinesh Patel, Global Head of Financial Services, Snowflake. “With demands for data higher than ever, the opportunity cost is rising for firms that stick with legacy technologies. Firms will need to leverage the value of cloud technology to tackle increasing financial crime, improve the propensity for data insight, and support the data-rich needs of today’s customers. Be it quant researchers seeking to analyse more data to backtest strategies, banks striving to create a new suite of sustainable finance solutions, or underwriters seeking to price risk more accurately — they all need to power their workloads on the cloud with flexibility, scale, and performance to deliver business outcomes.”

Snowflake’s Financial Services Cloud Pulse Survey asked global C-Suite leaders and senior-level technology executives from leading financial firms across banking, asset management, and insurance on their cloud data competency, analysing everything from industry challenges and decision complexity to enterprise strategy and business impact. While almost half of respondents (48.7%) believe they will deliver on their future data cloud strategy in two-to-five years, many financial firms already have business use cases in place or within the next 12 months, suggesting business urgency.

On this cloud journey, the report also found that 37% of financial firms are choosing to adopt a multi-cloud strategy in comparison to hybrid (34%), single (14%), or private cloud (14%). Their decision was based on three key benefits, including: access to the best individual solution providers (67%), flexibility to negotiate on costs (44%), and access to modular flexibility (36%) in a data platform capability. Multi-cloud is seen as part of a broader push towards increasing infrastructure reliability, cost efficiency, interoperability, and ensuring regulatory compliance.

Additional findings from the report, include:

●      Many financial firms are adopting modern cloud data platforms to benefit from enhanced data science capabilities (34%), as organisations opt for better data outcomes, automation, and a competitive edge. This is supporting organisations’  drive for new product developments and applications.

●      The ability to share or collaborate with users (34%) and use cloud-enabled data marketplaces (12%) were also listed as benefits in enabling organisations to take advantage of a cloud environment that provides users with query-ready data access. Users can enhance internal data with external data to enrich data analysis and insight.

●      Organisations are spending up to 40% of their time on data management alone. This is resulting in many financial firms investing efforts away from business innovation and decision making, and increasing costs and time on cloud data management.

●      While most organisations (66.9%) mention that their technology teams are primarily responsible for cloud investments, the research indicates that other parties are becoming more influential in the decision-making process, including from the line of business (15.4%), and the centralised data office (16.1%).