Financial services organisations risk falling behind their competitors without a clear cloud strategy. 

In 2020, a financial services organisation without a cloud strategy is an organisation without a comprehensive business strategy. Cloud is increasingly becoming fundamental to business strategy, enabling organisations to gear for growth by being agile, responsive and innovative while providing incredible customer experiences 

All banks surveyed by Accenture in 2017 recognised that cloud would change their IT operating model. The business case is so clear and compelling that 97% of banks have already begun to adopt cloud. What’s questionable is the extent of deployment, as less than half the respondents have implemented orchestration, automation and self-service tools for cloud. This implies the others are still “experimenting” or doing piecemeal projects which will neither drive culture change nor yield the desired business outcomes.   

Novarica, in a recent research study, found that more than 70% of insurers use some cloud, and are planning to use more. One in ten insurance companies already run most of their infrastructure on cloud. The value realisation from cloud becomes evident as adoption increases.  

This may be stating the obvious, but the potential benefits of cloud include: 

  1. Cloud can strengthen the organisation’s balance sheet. It is accounted for under operating expenditure, reducing a firms capex and creating better predictability of costs. Cloud also helps in reducing the cost of ownership of complex IT estates.  
  2. Cloud offers easy access to sophisticated data and AI capabilities thus enabling personalisation, leading to higher conversion rates and improved customer experiences. We have seen improvement in cross-sell, upsell and retention rates with cloud adoption. 
  3. Cloud offers better flexibility and standardisation for organisations that have growth aspirationsand/or presence in multiple geographies.   
  4. Cloud provides elasticity to manage variability in demand.
  5. But perhaps the most dramatic benefit of cloud is how it improves speed to market and provides opportunities for collaboration with ecosystems partners to foster innovation. 


A startling and atypical example is the South Korean company Kakao. In 2010 it launched KakaoTalk, the “WhatsApp of South Korea”, and today over 90% of the population is on the platform. 

It launched a few games which required a KakaoTalk account to run. The company was so successful that it is the third biggest publisher by monthly revenue at Google Play — an astonishing record for a company active in essentially a single country. 

On a back of its massive user base and its cloud-first and mobile-first nature, the company decided to launch a bank. It was one of the first few South Korean companies to gain an Internet-only banking licence. Customers could open bank accounts and start transacting — including borrowing money — without ever going to a branch.  

Within just 96 hours the bank attracted 820,000 customers. The dedicated banking app was downloaded 1,5m times in the same period. Two months later, in Sept 2017, the company lent $1,2billion which was 40% of South Korea’s total loans for that month. That’s an astonishing achievement. 

Cloud is a relevant conversation for CXOs of most financial services organisations in South Africa. We have seen some examples of cloudfirst banks in the likes of Tyme. While it’s early days to analyse their overall business results Tyme has reported a significant growth in customers  although unlike Kakao in South Korea, it did not have the leverage of an existing client base that could be tapped into.  

It is interesting to note that across financial services organisations, cloud is no longer an IT project but rather business priority, and the conversations have shifted from security and risk to organisation agility and innovation. The organisations that act fast will benefit from an earlymover competitive advantage. 

For more information, please contact me.