New research from F5 reveals that the financial services industry is accelerating its shift to the cloud, as it presses forward with digital transformation in the face of security concerns.
According to the Financial Services edition of the 2020 State of Application Services (SOAS) report, 60% of surveyed organizations in the industry believe public cloud platforms will be strategically important for them in the next two to five years, up sharply from 49% in 2019. That places adoption of the public cloud as the industry’s most important strategic priority.
It comes as 84% of financial services organizations execute on digital transformation plans, with three quarters saying the key driver is to increase the speed of new product and service deployment. Cloud adoption is increasing even as security concerns remain widespread. While two-thirds of organizations are confident in their ability to withstand an application attack on premises, only 40% said the same when it comes to the public cloud.
“The idea that financial services applications would be the slowest to move into the cloud has been clearly disproven,” said Lori MacVittie, Principal Technical Evangelist, Office of the CTO at F5.
“Instead we are seeing the industry go ‘all in’ on multi-cloud adoption as organizations seek to increase the pace of their digital transformation and more quickly deploy the applications that will deliver a high-quality customer experience. Ultimately, financial services organizations that face growing competition from digital challengers are turning to the cloud to meet the needs of customers who now expect a seamless fintech service.”
As cloud adoption increases, financial services organizations are seeking to balance the innovation imperative with security needs.
Many are looking to open banking, which 47% of surveyed organizations (among the two-thirds of respondents who provide banking services) have either implemented or plan to do so. Within this subset, 68% are deploying API gateways to deliver innovation, allowing them to securely share data with partners and open APIs to public developer networks.
82% of organizations with open banking initiatives have published APIs to third parties, compared to 62% of those not engaged in open banking.
In this context security remains a pressing concern, especially with 87% of organizations embracing multi-cloud environments, and 41% determining the type of cloud to support an application on a case-by-case basis.
Asked about the biggest challenges of managing applications in a multi-cloud environment, 59% of respondents highlighted the need to apply consistent security policies across all company applications, well ahead of migrating apps among clouds/data centers (32%), gaining visibility into application health, or optimizing the performance of the application (both 26%).
Security clearly resonates as a priority for the entire industry. Over half of respondents named it as the most important characteristic of an application service, while financial services leaders ranked real-time threat analytics as their number two strategic trend, compared to number six across all industries. Three quarters of respondents said it is important to enforce the same security policies on premises and in the cloud.
Nevertheless, the industry fears that it lacks the capacity to effectively respond to threats, with 72% of respondents reporting that they face a security skills gap.
