A recent study by the National Business Research Institute and Narrative Science found that most financial institutions are only in the beginning stages of cloud and AI adoption. In fact, only about 32% of the survey respondents confirmed using technologies such as cloud-based voice recognition, predictive analytics and recommended engines.
Cloud and AI have become mainstream in many industries, so why is the finance industry so slow to adopt these innovations?
Many financial institutions have stated that their lack of adoption of AI and cloud technologies is due to the belief that this technology is too new, untested and risky. Gartner, however, predicts that through 2020, public cloud infrastructure as a service (IaaS) workloads will suffer at least 60% fewer security incidents than those in traditional data centers.
Although there is a general skepticism around new technologies in the finance industry, more companies are finding that adopting cloud technologies are making procedures smoother and more secure.
What is the Cloud?
The cloud is a virtual database that connects users from anywhere. It can also be used as a means to share information, resources or software via a network. This sharing of information with others is called cloud computing. The following are just a few ways the cloud can be a helpful resource for organizations:
- Speed and agility:
The cloud can help companies enter new markets, drive innovation and improve productivity faster.
Organizations can right-size their needs, scale up and down quickly and minimize resource planning through utilizing the cloud.
Using the cloud will allow you to pay only for what you consume, shedding capital investments.
Cloud will protect an organization’s data and users better than traditional IT systems.
Adopting cloud technologies has allowed financial institutions to work more efficiently and securely. For example, Capital One, one of the largest banking companies in America, has moved entirely to cloud infrastructure.
"Traditionally, one of the biggest barriers of effective IT has been friction in the system. Cloud gets rid of all that friction. Computing resources are available in minutes. And the cloud provider takes care of configuring and managing them. Magic, right?"
- Bernard Golden, Vice President of Cloud Strategy at Capital One
As technology continues to play an increasing role in business strategy, implementing cloud and AI into the finance industry has gained support from organizations and their leadership. The CEO of JP Morgan, Jamie Dimon, also discussed his confidence in the cloud in JP Morgan’s most recent annual report.
"On the importance of the cloud and artificial intelligence, we are all in. The power of the cloud is real."
- Jamie Dimon, CEO of JP Morgan
Jamie Dimon’s Praise of the Cloud
Despite his initial skepticism, Dimon states that the key component to the cloud’s legitimacy is that its capabilities are far more extensive and are now full speed ahead. He commented on the cloud’s potential by stating that the cloud gives companies the ability to attain exponential power that is beyond our own capacity.
Along with this exponential power that the cloud supplies users with, Dimon expressed that the cloud platform allows for companies to be agile and flexible, which essentially increases developers’ effectiveness. The cloud also allows for developers to learn quickly and deliver work to clients and customers which much better speed. Dimon also assures users that the cloud has matured and can now meet the high expectations and intense demands of companies.
Utilizing the cloud allows companies to organize teams in a different way which brings forth more agile and innovative products and services. In terms of JP Morgan, Dimon announced that most of their applications will be “refactoring” to take full advantage of cloud computing.
Making the Most of Cloud for Your Business
The finance industry is increasingly reaping the benefits of the cloud, and we expect this trend to only increase. At BDO Digital, we can help you leverage the advantages of the cloud while understanding your business goals, market dynamics and technology assets. Contact us to learn more about our cloud solutions or get started with a Cloud Economic Assessment.