As financial services firms grapple with rapid technological evolution and mounting consumer expectations, cloud adoption has emerged as a transformative strategy.
According to the 2025 World Cloud Report by Capgemini, it offers unparalleled opportunities to drive operational efficiency, innovation and customer satisfaction – yet, the journey to achieving these goals is fraught with challenges.
The Shift to Cloud-First Strategies
The financial sector’s transition to cloud infrastructure is reshaping traditional operational models.
A staggering 91% of financial organisations now utilise at least one cloud platform, compared to just 37% in 2020.
However, less than 40% report high satisfaction with outcomes such as cost reduction, scalability, and innovation. This highlights a critical gap between expectations and reality in leveraging the technology.
While traditional banks focus primarily on cost savings, fintech and insurtech disruptors are using the it to redefine customer experiences and deliver innovative products.
For instance, firms are embracing cloud-native platforms to support real-time data analytics, predictive modelling, and artificial intelligence (AI)-driven solutions.
Key Operational Challenges
Despite its potential, adoption presents hurdles. Key challenges identified in the report include:
- Data Integration and Security: Legacy systems impede seamless integration, while rising cybersecurity threats elevate risks.
- Regulatory Complexities: Compliance with diverse and evolving financial regulations remains a significant constraint.
- Cloud Transition Costs: Inefficient migration strategies, such as “lift-and-shift” approaches, often fail to deliver expected ROI.
Capgemini emphasises the importance of strategic planning, including modular infrastructure design, robust data governance, and alignment with regulatory frameworks to overcome these barriers.
Innovation with Scalable Cloud Platforms
Financial services firms are increasingly recognising the value of scalable cloud platforms to drive agility and responsiveness.
Platforms like Google Distributed Cloud Virtual (GDCV) enable real-time data processing and dynamic resource allocation, addressing workload spikes and enhancing operational efficiency.
Innovators are also leveraging generative AI to unlock new possibilities. From predictive analytics for fraud detection to AI-powered chatbots for customer engagement, these technologies enable firms to personalise services and scale operations efficiently.
Based on the research, 12% of banks and insurers can be classified as innovators who leverage a well-defined cloud vision supported by scalable platforms and mature ecosystems to generate superior top-line results.
This strategy is reaping significant rewards:
- 32% of innovators exceed upsell and cross-sell targets compared to 12% of their counterparts
- 32% exceed data monetisation targets versus 10% of other banks and insurers
- 22% exceed innovative product development targets compared to 10% of financial institutions
To accelerate operational efficiency and innovation, the report suggests banks and insurers must apply a data-driven, cloud-focused approach. This requires an attention toward creating applications natively for the cloud, investing in cloud-skilled professionals, building a culture that encourages the sharing of ideas and best practices, and democratize access to technology for all teams.
Cloud Ecosystems as Catalysts for Growth
Collaboration is key to maximising the benefits of cloud adoption.
According to the report, 69% of financial executives view partnerships with cloud providers and fintech firms as vital. These ecosystems facilitate enhanced data insights, faster product development, and seamless integration of innovative solutions.
For instance, Lemonade, a US-based insurtech, partnered with Google Cloud’s Looker platform to create a unified data infrastructure.
This enabled the company to deliver tailored customer experiences, resulting in a 150% compound annual growth rate over five years.
Customer-Centric Transformation
A data-driven, cloud-focused approach allows financial institutions to redefine customer engagement.
By integrating advanced analytics and customer relationship management (CRM) tools, firms can deliver personalised experiences across channels.
However, adoption remains low, with only 14% of firms fully implementing omnichannel engagement strategies.
The report highlights a five-step approach to enhance customer experience:
- Centralised data collection through cloud-based CRM platforms
- Real-time insights via predictive analytics and AI
- Proactive, personalised communication
- Modernised contact centres with intelligent chatbots
- Continuous iteration and scaling using cloud-powered tools
A Path to Long-Term Growth
Cloud adoption is more than a technological upgrade – it’s a strategic imperative for future-proofing financial services.
By embracing a native mindset, fostering ecosystem partnerships, and prioritising customer-centric innovations, firms can achieve not only operational efficiency but also top-line growth.
“Cloud adoption should be viewed as the start of a transformative journey that fuels long-term business growth, rather than the end game or destination,” says Ravi Khokhar, Global Head of Cloud for Financial Services at Capgemini.
“What’s clear from our research is that while the technology is seen by financial institutions as a building block, some firms still consider cloud a cost-saving measure, whereas innovative disruptors leverage it to redefine their operation.
By taking a cloud native approach to foster a culture of innovation, banks and insurers will be better placed to deliver new products and services, enter new markets, and increase customer satisfaction.
With generative AI now top of the boardroom agenda, a cloud-based technology foundation can also help the industry maximize investment in new technologies at scale.”
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