COVID-19 has accelerated the ‘digital imperative’ call of organizations, positioning digital technologies like cloud computing at the forefront of efforts to boost digital transformation.
Cloud computing is intertwined with everything we do — from remotely accessing files during pandemic-related lockdowns, to using on-demand streaming services or providing analytics for optimized banking solutions. In the financial sector, cloud services are increasingly enabling organizations to deliver better products and services to the benefit of consumers. The flexible nature of cloud computing offers instant availability, resilience and security.
Cloud computing adoption in the banking industry continues to advance as organizations realize how critical this technology is to their business operations. As the Institute of International Finance (IIF) asserts, cloud adoption questions are not about ‘if, but rather, how.’
The cloud computing market is poised for rapid growth in Latin America. According to the International Data Corporation (IDC), 75% of large regional enterprises will put a mechanism in place by early 2022 to shift to cloud-centric infrastructure and applications twice as fast as before the pandemic. IDC estimates that, of the projected $460 billion IT spending in the region from 2020 to 2023, 35% of it will be cloud-related.
Cloud computing solutions could also advance financial inclusion in Latin America; cloud services can help the banking sector reduce costs and increase flexibility, allowing more citizens and companies that lack access to banking to make use of financial services.
However, significant steps need to be taken to harness the benefits of the cloud within the region’s banking sector. In this report, Access Partnership articulates practical regulatory recommendations to achieve the uptake of cloud computing among banks, particularly by addressing common misconceptions and barriers. These include:
- lack of information and/or poor understanding of how cloud computing works;
- keeping up with regulatory trends and global best practices regarding sensitive data management;
- ambiguity and lack of government endorsement;
- increased public attention and new data governance regulations; and
- insufficient connectivity infrastructure.
For financial institutions to reap the benefits of cloud technology, enabling policy frameworks and industry best practices must be implemented to build trust and a common understanding between the Financial Services Industry (FSI), regulators and end-users.