Trends shaping future of cloud in financial services APAC

A combination of companies fast-tracking digital transformation and cutting back spending on technology, both thanks to the pandemic, is leading to a surge in organisations adopting cloud services in order to secure scalable, resilient, available and agile IT operations. 

Cloud spend set to grow

In particular, cloud services spend across financial services in Asia Pacific continues to grow, according to IDC's Worldwide Public Cloud Services Spending Guide, January 2021, which outlined that in Asia Pacific (bar Japan) public cloud spend of financial services insitiutions is set to grow more than three times from US$4.9bn in 2019 to US$18.1bn in 2024 at a CAGR of 29.9%. 

“Cloud will continue to be a significant foundational pillar for financial services institutions for the foreseeable future,” says Sneha Kapoor, Research Manager at IDC Financial Insights Asia/Pacific. “As enterprises invest in cloud, IDC has observed that the ability to shift cloud spending from capex to opex has proven to be a successful enabler for future cloud investments, scalability, and availability.”

As cloud investment models continue to evolve, the way FSIs manage their cloud services must evolve too, says IDC, with the next two years set to bring forward a continued shift from monolithic models to more simplified cloud services. 

IDC Financial Insights expects that by 2023, 85% of tier-1 and tier-2 APEJ banks will curate an infrastructure strategy by coalescing on-premises/dedicated private clouds and multiple public clouds, along with legacy platforms, to assuage their many infrastructure requirements. 

According to Clay Miller, Senior Executive Advisor at IDC Financial Insights Asia Pacific, hybrid cloud environments and the use of multi-clouds means a more agnostic experience for delivering container-based workloads. “Expanding microservices will offer increased tangible benefits and leverage developer independence, scalability, and rapid deployment capabilities,” he adds. 

Six key market trends defining cloud demand

IDC Financial Insights Asia Pacific’s latest Cloud Outlook 2021 report underscores six key market trends that continue to define cloud demand and subsequently the future of cloud in financial services in 2021 and beyond.

1. Trend 1 The urgency to transition from Capex to Opex becomes stronger
2. Trend 2 Hybrid cloud, multicloud, and joint provider-cloud strategies
3. Trend 3 Saying ‘yes’ to cloud native means saying yes to enhanced microservices, containers, and orchestration tools
4. Trend 4 The burgeoning use of cloud marketplaces speeds up long impending fintech collaboration
5. Trend 5 Cloud becomes a principal route to bring in enterprise intelligence and data-driven innovation
6. Trend 6 Ultra-lean fourth-generation core banking is here with cloud becoming an essential tenet