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Cloud computing to move to ‘heart’ of the banking industry, analyst says

Cloud computing adoption is set to move to the mainstream of the banking industry, an IT analyst has predicted.

A survey by Gartner showed that cloud computing is a top concern for chief information officers (CIO) at firms in the financial services sector with more than a third of participants expecting over half their transactions to take place via cloud or software as a service (SaaS) by 2015.

Peter Redshaw, managing vice-president at Gartner, said that cloud computing is at the heart of future banking processes and transaction origination and will help drive “’creative destruction’”.

“As well as helping to improve or optimise an existing service or process, cloud banking can provide the wealth - or the freedom - to try completely new services and processes, such as reverse auctions and third-party core banking systems, maybe even running them in parallel,” he explained.

According to Gartner, the adoption of cloud computing will change bank processes relating to algorithmic operations (AO).

These AO will increasingly replace staff members so that the value of the latter is in improving processes rather than running operations, the research body explained.

Previous findings from Gartner’s study showed that 44 per cent of CIOs at financial services firms in Europe, the Middle East and Africa expect the cloud to support more than half of their transactions by 2015.

By Jim Ottewill