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Report: Banks turning to cloud computing during economic crisis

The ongoing global economic crisis has put a damper on IT spending around the world, causing decision-makers from a variety of industries to be more conservative and only invest in technologies proven to boost efficiency and deliver a high return on investment. This trend is especially true among banks and financial organizations.

According to a new report by IDC Financial Insights, IT spending at European banks will expand at a compound annual growth rate of 3.6 percent through 2015, while North American investments will increase at a CAGR of 3.7 percent. While spending on technology will not grow as much as it has in the past, the saving grace for banks is that their increased adoption of cloud hosting services will lower IT costs and boost productivity.

"[Many] banks are taking a closer look at their expense budgets as they consider new IT investments," IDC Financial Insights vice president Jeanne Capachin said. “However, there are bright spots as the Middle East remains a strong growth market for financial services technology and the adoption of public cloud services among U.S. Banks has surfaced as a way to innovate despite tight IT spending controls."

In the past, financial institutions were skeptical about hosting sensitive solutions in the public cloud because of perceptions regarding a lack of security. This has changed recently as the cloud matured and decision-makers regained confidence in its ability to protect valuable assets.

A report by the 451 Group noted that approximately half of managers now believe public cloud storage environments are safe enough to host mission-critical information. By leveraging the public cloud, financial organizations can reduce IT expenses and enhance efficiency.

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