A survey of 600 executives and 120 fintechs/insurtechs across 13 countries reveals that financial firms face significant hurdles in realizing the full value of their cloud investments.

Operational challenges continue to slow the return on cloud transformation initiatives, with fewer than 40% of executives expressing high satisfaction with their cloud solutions. Key areas of dissatisfaction include reduced operational costs (33%), enhanced scalability (27%), accelerated innovation (26%), advanced data analytics (24%), and improved security and compliance (21%).

The report identifies several roadblocks, including reliance on a lift-and-shift approach to cloud migration, unanticipated costs from rapid scaling, complex pricing models, and ineffective governance practices. Integration with legacy systems, data security concerns, and poor data quality also remain critical challenges. Additionally, while artificial intelligence, predictive analytics, and robotic process automation are seen as vital for a cloud ecosystem, only a fraction of traditional financial institutions demonstrate maturity in these technologies, with just 15% achieving capability in AI, 30% in predictive analytics, and 22% in robotic process automation.

Despite these obstacles, firms that adopt a cloud-native approach and focus on innovation reap substantial rewards. These include growth in upsell and cross-sell opportunities, data monetization, and faster product development. Ravi Khokhar, Capgemini’s global head of cloud for financial services, emphasizes the importance of leveraging cloud as a strategic tool rather than just a cost-saving measure, stating, “A cloud-based foundation enables banks and insurers to launch new products, enter new markets, and boost customer satisfaction, especially with generative AI now a priority at the board level.”