Market Overview
A public cloud service is an IT model in which providers contribute to the availability of computing services like data processing and storage, develop-and-deploy landscapes, and applications to organizations and individuals via the public internet. Cloud computing has become a popular choice for banks seeking to reduce costs, increase flexibility, and accelerate digital growth. Adopting front-end and back-end operational models for digital banking has been made possible by cloud computing technologies in the financial services sector. Strong growth in digital transformational strategies across the BFSI industry and increased internet and mobile device penetration globally drive the growth of the global public cloud in the BFSI market size. In addition, the rising popularity of AI and machine learning fuels its growth and global market expansion. However, the public cloud’s expansion in the BFSI market is constrained by regulatory complications related to data residency. On the other hand, increased adoption of the Internet of Things (IoT) is expected to offer lucrative opportunities for growing the public cloud in the BFSI market during the forecasted period.
Key Trends
- Credence Research Inc. anticipates that increased global internet and smartphone device penetration will be a key trend in the public cloud in the BFSI market. The increased internet use has increased demand for online banking segments, significantly impacting the global market expansion. Banking and financial institutions are migrating to cloud software to streamline operations and gain access to data from anywhere, as the software automatically updates businesses on transactions. As a result, rising internet and smartphone device penetration is expected to drive public cloud adoption in the BFSI market during the forecast period.
- Another key trend that Credence Research Inc. predicts will continue in the public cloud in BFSI market is the expansion of government initiatives to accelerate public cloud adoption in the BFSI sector across the globe. Businesses are migrating to the cloud, searching for cost-effective, flexible, on-demand digital data storage solutions. As a result, governments worldwide are increasing their investments in BFSI public cloud delivery models. The public cloud reduces the price of acquiring, establishing, operating, and maintaining technological services in the financial sector. The public cloud in BFSI also enables governments to scale up public services as needed and respond quickly to user demands.
Browse full report with tables, lists and Figures – Public cloud in BFSI market (By Type (Infrastructure as a Service, Platform as a Service, Software as a Service, and Others), By Component (Software and Services) Growth, Future Prospects & Competitive Analysis) report, 2022-2030
Economic Impact Analysis
When the global economy weakens, all industries start to experience challenges. The public cloud in BFSI market report, 2022-2030, considers the predicted effects of the impending recession on cloud migration and BFSI companies’ concerns about rising prices on cloud platforms’ pay-as-you-go models.
- Recession
According to a Credence Research Inc. market report, the recession will not affect the global public cloud in the BFSI market. The impending recession will not impact cloud computing services, regardless of how long it lasts. Enterprises are continuing to embrace digitization, which is expected to continue in the long term. The cloud plays an important role in this transition because moving to the cloud remains the most efficient way for modern businesses to accomplish more with less. However, the impact of inflation and the economic downturn on the market for cloud services was clear, as most of the top cloud vendors missed their revenue targets in the first quarter of 2023.
- Ukraine-Russia War Impact
The Russia-Ukraine War has triggered a crucial geopolitical turning point for Europe and the entire planet that will impact the global demand for public cloud services in the BFSI market over the next few months and years. The conflict between Russia and Ukraine will only alter how businesses approach the public cloud. With the Ukraine conflict and related economic sanctions against Russia reverberating around the world, the long-term consequences are likely to be felt by financial systems and supply chains far beyond Eastern Europe. The foundation of the global digital infrastructure, cloud data centers, will probably be impacted. Higher power costs will have the greatest impact on European cloud data centers.
- China COVID Outburst December 2022
The COVID-19 pandemic had a positive impact on the finance cloud market. Public cloud has significantly increased its market share in the BFSI sector globally due to the widespread use of cloud computing as an engine for digital transformation to support business continuity during the pandemic period. The COVID-19 pandemic has significantly impacted the insurance industry’s demand for financial cloud services, which has increased as businesses improve their digital customer experiences and operational procedures. Before the COVID-19 outbreak, 91% of banks and other financial institutions used or planned to use the cloud. According to a new Gartner survey, application digitalization is the most commonly cited goal in banking and investing services, with 70% of banking leaders expecting to increase their public cloud spending in 2023.
- Regional Analysis
North America dominated the global public cloud in the BFSI market in 2022 due to its early cloud technology adoption in the regional banking sector. Many regional vendors, including Oracle Corporation, Microsoft Corporation, Amazon.com Inc, and IBM Corporation, and a greater propensity to adopt new technologies, are expected to help this region maintain its market position. Furthermore, it is estimated that more than half of all government organizations in the United States have deployed these services. Besides, the Asia Pacific region is expected to grow the fastest in the global public cloud in the BFSI market. Increased public cloud application deployment in the BFSI market to meet growing demands for customer relationship management, expanding client needs, and enhanced regional digitalization is attributed to market growth.
STAR Analysis
- Situation
Our client, a banking industry leader, wanted to upgrade their digital banking solutions, which would benefit them with both front-end and back-end banking operational models. They wanted a strategic cloud partnership to boost resilience, intensify the development of new cloud capabilities, and lower expenses.
- Task
The client preferred to build a next-generation cloud-based operational model for capital markets that would allow for regular regulatory compliance and policy updates. Additionally, they were looking for a cloud computing vendor who could offer them an OPEX model to enable them to avoid high CAPEX costs.
- Action
The client contacted Credence Research Inc. and assisted them in locating a cloud technology partner while ensuring operational resilience to comply with the most recent regulations. Credence Research Inc. provided comprehensive vendor profiles for the major public cloud service providers, including a company overview, enterprise insights, cloud performance metrics, and Pestel analysis. The client report also includes information on key drivers, restraints, and opportunities, as well as an analysis of their impact on global public cloud in BFSI market technological trends.
- Result
Credence Research Inc.’s in-depth analysis of the public cloud in the BFSI market assisted the client in utilizing their resources efficiently and optimally to provide a customized and personalized customer experience. Additionally, the client was helped in choosing the best public cloud vendor for their banking application by carefully examining key insights on technological trends, provider profiling, and service delivery category, which allowed the client to increase the capacity of its banking services.
