Less than half (47 percent)​ of financial services organisations agree that the cloud has met their expectations.
Dublin, Ireland: 22 April 2015 – Sungard Availability Services​® (Sungard AS), a leading provider of information availability through managed IT, cloud and recovery services, today announces research which reveals that financial services organisations are spending over €360 million each year on maintaining cloud services and hidden costs associated with their cloud computing projects. The research questioned 66 senior IT decision makers in the UK, Ireland, France and Sweden in organisations with more than 500 employees, with an average cloud spend of €846,000 in the last year. The results are part of a wider study of 400 interviews with IT decisions makers which revealed that the ‘Cloud Hangover’ is costing European businesses an average of more than €2 billion per year.
Long considered a more flexible and simpler approach to managing IT, cloud computing has ushered in a new era of IT. However, the research reveals that financial services organisations are now facing a large number of challenges in managing and operating these cloud environments.
The research revealed that the overwhelming majority of financial services organisations in the UK, Ireland, France and Sweden have encountered some form of unplanned cloud spend (89 per cent), with this sector being significantly higher than manufacturing (74 per cent) and public sector respondents (75 per cent).
Worryingly, overall cloud spending – whether this is for maintenance or unexpected costs, is considerably higher within financial services than across other verticals. Each financial services organisation is paying an average of more than €335,000 per year on maintaining cloud services; this compares to a European average of €241,000.
When it comes to unexpected costs, financial services organisations are experiencing almost double the European average (€326,000), with each organisation spending an additional €689,000 over the last five years thanks to unforeseen costs such as systems integration (54 per cent), people to manage deployment (34 per cent), and integration costs between different clouds (39 per cent).
Moreover, although over half of financial services organisations (56 per cent) cited reduced IT costs as an expected return-on-investment in adopting cloud services, a third (33 per cent) believe this has not been achieved.
Despite being touted as a way to reduce IT complexity, almost a third (32 per cent) of respondents said that cloud had in fact increased the complexity of their IT infrastructure. Meanwhile, 53 per cent claimed that cloud computing added a new set of IT challenges – with interoperability between their existing IT estate and their cloud platforms considered by 44 per cent as the biggest issue.
Keith Tilley, Executive Vice President, Global Sales & Customer Services Management at Sungard Availability Services, said “Financial Services organisations have been quick to adopt the cloud to help streamline operating costs and processes and most importantly, continue to innovate and provide new digital services to meet customer demands for contactless payments and mobile banking for example.
Interviews were carried out in February 2015 by Vanson Bourne on behalf of Sungard Availability Services. 400 interviews were conducted altogether: 150 from the UK, 150 from France and 50 each from Sweden and Ireland. The research spoke to IT decision makers in businesses of over 500 employees in the UK, France and Sweden and 250 in Ireland across a variety of sectors – including 66 decision makers from financial services organisations.