Banks and credit unions are increasingly adopting cloud technology and IT outsourcing in order to remain competitive, according to a new survey.
Many financial institutions are using IT outsourcing as a strategy to prioritize and execute technology projects, the survey found.
Others consider outsourcing the only viable solution for obtaining expertise needed to maintain their technical environments.
Computer Services Inc. and Cbanc Network surveyed 161 financial institutions across the U.S. to identify trends in cloud technology and IT outsourcing and identify areas in which they need more education and support.
The survey found that 23% of respondents planned to outsource more of their IT services in the coming year, compared with 14% in 2012. Ninety-four percent of institutions planned to outsource at the same level or more than they currently do.
Half of respondents reported that some percentage of their IT assets was already being delivered in the cloud, up from 38% in 2012. Those reporting no IT assets in the cloud dropped to 39% from 51% last year.
According to the data, 60% of financial institutions planned to outsource some percentage of their IT assets via the cloud over the next 12 to 18 months.
Survey respondents most commonly mentioned email encryption, backup, core banking applications and security as the cloud-hosted functions they were currently using.
Twenty-six percent of financial institutions reported use of core banking applications in a hosted environment.
The data showed that between 2012 and 2013, the most measurable growth in cloud/hosted applications occurred in security services, disaster recovery and hosted email.
In another finding, 45% of banks and credit unions believed that shared management between the cloud service provider and an in-house IT team made the most sense for the organization.
Respondents considered disaster recovery as the top benefit of cloud technology and IT outsourced services. They also benefited from simplified management processes, flexibility and scalability.
Security remained the biggest concern for 75% of financial institutions that had migrated services to the cloud. Compliance, loss of control and the costs and uncertainty of return on investment were also top concerns.
Nine percent of respondents said they had received guidance from their examiner or auditor on the use of cloud services, compared with 3% who had in 2012. However, 75% reported that they had yet to receive any guidance related to cloud technology.
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