Banks and insurers in the region are still taking a measured approach to cloud, according to an IDC Financial Insights report.
The survey Perspective: A Slow Ascent Toward the Cloud for Asia/Pacific Financial Services revealed that CIOs are waiting for further clarity on regulations and better articulation of business benefits by IT vendors.
Not more than 45 percent of the respondents from Singapore, Malaysia, China, India, Australia, and New Zealand have adopted some form of cloud computing services.
"The financial services industry, typically an early adopter of technology, has been uncharacteristically slow to take on cloud. There is still no wide-scale adoption of the technology," said Michael Araneta, associate consulting and research director for IDC Asia/Pacific.
The preference of the surveyed parties is for the more manageable private cloud implementations, and usually for non-mission critical areas such as IT management, server capacity, and storage.
Regulation appears to be a major hurdle for widespread adoption of cloud computing in the industry. "Our regulators have been very vocal about their concerns regarding anything cloud, and the stringent guidelines that they have set for financial institutions to abide by have to some extent, negated the supposed advantages of lower cost, and ease and speed of deployment of the technology," said Araneta.
For cloud to gain momentum there needs to be greater clarity on regulations concerning cloud computing, which is not the case at present; the survey found that 62.5 per cent of the respondents either stated that regulations have become less clear, or that there has been no change to their understanding of what is or is not allowed by regulators.
However, it is not all doom and gloom. The industry expects developments in regulatory policies to take place in the next two years and this will facilitate the uptake of cloud computing; 51.7 per cent of the respondents expect that regulations will be either "slightly more open" or "significantly more open" to cloud computing in the next two years.
The report also cited that 66.1 percent of the respondents see cloud computing primarily as an IT issue, without much consideration of the business-related benefits such as the ability to regionalise more quickly, deploying capabilities more efficiently, or lower cost-to-serve numbers.
"Such propositions must be conveyed in a non-technical language that the various stakeholder groups can understand. Most importantly, all internal users must be made aware of organisational pain points that can and cannot be addressed by the cloud," said Sui-Jon Ho, market analyst, IDC Financial Insights Asia/Pacific.
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