The adoption of hybrid Cloud services is identified in a new report by IBM as a precondition for effective digital transformation. The report, based on interviews with 2,000 banking CIOs and CTOs worldwide and published by the IBM Institute for Business Value (IBV) connects the use of hybrid Cloud to six key practices and capabilities it found were shared by healthier financial firms.
The practices include the ability to deploy AI factories for products on the Cloud via sandboxes, end-to-end digitalisation across business units and engaging in partner ecosystems between firms and they are best employed when using a hybrid Cloud, according to IBM..
And there’s a huge potential among banks to accelerate end-to-end digitalisation, the report found, with only 23% of respondents stating their workflows were automated or leveraging AI. The report noted a dramatic improvement in revenue growth when AI, IoT, and robotic process automation were used with a Cloud environment.
Defining health through a combination of a high return on equity and a low cost to income ratio, the IBM research identified a series of practices shared by the healthiest firms, which it deemed essential for accelerating digital transformation through increased flexibility.
Discussing healthier firms, Paolo Sironi (pictured), co-author and global research leader for banking and financial market at IBM, said that firms that were further along in their digital transformation, using tools like hybrid cloud, were able to engage more readily with other banks and to maintain their transformation momentum. “Given their higher comfort with digitalization, they engage more with partner ecosystems to accelerate innovation and banking transformation” Sironi said.
Among the executives interviewed, the mean percentage of hybrid Cloud workloads is expected to increase by 18% over the next three years to around one third of all environments used by banks; cloud-based or otherwise.