Financial sector ramping up cloud spending

Any hesitation that the financial sector had around the cloud seems to have dissapeared as customers in that vertical start to invest in hosted applications and services.

But there is a warning that as money is spent in the cloud it is being taken away from other areas and those in the channel selling hardware and traditional support contracts could be hit.

An insight into just what is happening in the financial services sector comes from Pearlfinders, a business information company that interviews over 3,000 senior IT decision-makers every year.

it has indicated that the financial services market will scale up IT spending in Q4 with cloud computing at the top of the list. Not too far behind is security and disaster recovery and then enterprise software.

The areas set to attract the least spending are telephony and virtualisation and the appetitie for managed services and outsourcing is lower than Q4 last year.

Pearlfinders also found that there was a 33% increase in supplier reviews in the sector indicating that it might be a good time for alternative pitches to be made by the channel.

“The sector’s initial hesitance towards migrating services into the cloud has all but evaporated, and we predict that the next twelve months at least will be buoyant for resellers pitching cloud solutions the financial services companies," said Mike Thorne, Pearlfinders’ commercial director.

"Cloud’s gain has naturally been at the cost of the solutions it replaces, particularly forward looking demand for hardware and associated support contracts,” he added.

The good news does not stop at cloud and there has also been a fairly dramatic increase year-on-year in the interest in security.

“The most significant shift has been towards investments in security and disaster recovery, which is up 13% on 2015. Clearly the new Directive on Payment services is already influencing CIO’s buying decisions. Financial institutions need to take greater steps to prevent the theft of their customers’ data, and suppliers that can offer solutions to mitigate the risks of hacking or identity fraud at the point of transaction will see success," said Thorne.

"Senior IT budget-holders are willing to spend a more on improving comms and collaboration. With Brexit negotiations ongoing, its’ imperative for financial institutions to demonstrate that they are open, friendly and willing to do business internationally," he added.