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Now is the time for smart banks to transition their core operations to the cloud

As banks face increasing competition from digital-first players, the urgency to transition core systems to the cloud becomes more apparent. With 82% planning to migrate mainframe workloads within a decade, the time for banks to embark on this journey is now.

Now is the time for smart banks to transition their core operations to the cloud

The backbone of a bank lies within its core systems, serving as both the engine and the heart of its operations. Understandably, banks often approach significant changes to these systems with caution. While many have embarked on the journey to the cloud, some have hesitated to transition their core functions.

However, the inevitability of migrating core functions to the cloud looms large on the horizon for banks. A survey conducted among executives of banks that have initiated their cloud journey revealed that 82% envisage having at least half of their mainframe workloads in the cloud within the next decade, with 31% already achieving this milestone.

One compelling reason driving this urgency is the escalating competitive landscape banks face. New players, ranging from digital-first banks to non-bank entities venturing into financial services, are exerting pressure. These tech-centric entrants leverage the full potential of cloud functionality, setting higher standards for product offerings and thus elevating customer expectations. Banks must leverage their cloud transition, including migrating their core functions, to match these expectations regarding agility and responsiveness.

Moreover, the readiness of solutions further underscores the impetus for migrating the core to the cloud. Public cloud providers and Software as a Service (SaaS) providers have diligently addressed compliance and risk issues, instilling greater confidence among banks in moving their core functions. In regions like Europe, hybrid cloud solutions, compliant with regional regulations, are readily accessible.

The potential financial impact significantly motivates banks to undertake core migration. Operating core workloads in the cloud presents opportunities for cost reduction in mainframe maintenance and empower staff to foster innovation in developing new products. Given these factors, the rationale for postponing core workload migration to the cloud is rapidly diminishing. The time for action is now. We advocate embarking on this transformative journey to ensure your bank remains competitive and resilient in the evolving financial landscape.

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