Enhancing Clarity in Cloud Technology: Banks Making Strides, yet Room for Further Improvement

**Cloud Computing Transforms Travel and Financial Industries**
Nearly 66 million passengers travel through Los Angeles International Airport annually. But for transportation to and from the City of Angels, travelers can remain in the clouds. That’s because an airport shuttle called the Los Angeles FlyAway offers a contactless, tap-on-phone payment option, powered by the cloud and piloted by Mastercard beginning in 2021.

**The Intentional Approach to Cloud Adoption**
“Intentionality is becoming more mainstream now,” says Howard Boville, head of IBM Cloud Platform. Companies are starting to think through business problems before jumping to leverage cloud haphazardly. This intentional approach has been underway for the past two years.

**Cloud Adoption in the Financial Industry**
Banks have moved 15% of their workload into the cloud by 2022, nearly double the prior year, according to research conducted by Accenture. However, the majority of workloads, representing 85%, are still stuck in legacy systems. Core functions such as consumer and commercial banking, payments, and risk and compliance have not yet been migrated due to concerns around security and compliance risk.

**Democratization of Cloud in Banking**
The greatest potential for cloud in banking lies in the democratization of the technology. Cloud can reduce expenses and power A.I. technologies, allowing for greater tech advancements such as smarter chatbots and enhanced functionality for mobile banking. Even midsize and smaller banks can compete with larger banks by leveraging cloud capabilities.

**Three Areas of Focus in Cloud Adoption for Financial Institutions**
According to George Maddaloni, executive vice president and chief technology officer of operations at Mastercard, the financial sector focuses on three areas when leveraging cloud. The first is running applications and software more efficiently. The second is testing new concepts rapidly. The third, which is explored most at Mastercard, is using cloud to extend the company’s large network ecosystem.

**Security Concerns and Cloud Adoption**
While security has been a major concern holding back adoption of cloud in financial institutions, those concerns are lessening. “On the cloud, security is engineered into the applications,” says Mike Abbott, Accenture’s global banking lead. Highly regulated sectors, such as financial services, tend to be leaders in deploying best practices when it comes to data security.

**The A.I. and Cloud Connection**
Cloud and A.I. go hand in hand, with the compute capability of cloud being essential for training A.I. models. For banks, A.I.-powered chatbots can enhance customer experiences by efficiently answering questions and providing support. The chatbots can constantly improve through training with large data sets.

**Cloud’s Impact on Private Equity**
Private equity firms, such as THL Partners, have been early advocates for cloud adoption. Cloud solutions have transformed the businesses they invest in, improving processes, reducing costs, and boosting margins. Fastaff, a travel nursing company, used cloud technology to create a mobile app that streamlined the registration process for nurses, improving communication with hospitals and enhancing operational efficiency.

**Embracing a Cloud-First Approach**
Many companies are adopting a cloud-first approach, prioritizing cloud solutions for their technological needs. This intentional approach allows organizations to leverage the benefits of cloud computing while considering regulatory requirements and industry-specific needs.