Nutanix Announces Cloud Adoption Status in the Financial Sector
Hybrid cloud penetration reaches 21%
Higher than the industry average, but with many challenges
On March 29, Nutanix released its Enterprise Cloud Index (ECI) report, outlining the current status and outlook for cloud adoption in the financial services industry.

A survey of hybrid cloud adoption rates by industry found that the financial services industry's hybrid cloud adoption rate was 21%, higher than the industry average of 18.5%.

Financial services firms face the challenge of streamlining operations while providing differentiated customer experiences, including leveraging emerging technologies like blockchain.

As fintech innovation becomes increasingly complex, coupled with regulatory compliance, data privacy, and security concerns, CIOs must fundamentally transform their technology foundations.

This Nutanix ECI report demonstrates how the financial services industry is leveraging cloud computing to address its needs.

Research shows that many financial firms struggle to modernize their existing legacy IT architecture and methods, which can lead to operational inefficiencies and data breaches.p;

The financial services industry's traditional data center operation rate was 46%, higher than other industries, and while hybrid cloud adoption was high, private cloud utilization was 29%, lower than the other industries' average of 33%.

Like other industries, financial services respondents cited security and compliance as the most important factors in determining where to run their workloads. Furthermore, nearly all respondents cited performance, management, and TCO as important factors in IT decision-making, while more than 25% cited performance, management, and TCO as challenges in adopting public cloud.

When considering new IT solutions, the factors often considered most important are often the most difficult to achieve. This demonstrates that despite the financial services industry's strong interest in adopting hybrid cloud, the actual adoption rate is only 21%.

Automation and flexibility in IT environments are advancing by the day, enabling companies to purchase, build, or lease IT infrastructure resources to meet rapidly changing application requirements. Furthermore, the adoption of hybrid cloud is showing promising prospects across the globe and across various industries. Other key findings from the ECI report related to the financial services industry include:


Financial firms prioritize application mobility.
Application mobility is a technology that enables the free movement of applications and workloads across private and public cloud infrastructures, at a level that workload type and economics warrant, while integrating management and operations.

The financial industry, as well as other industries, cited application mobility as the second reason for choosing hybrid cloud. The financial industry saw a slightly higher proportion at 13% compared to the average for other industries. Sixty-three percent of financial industry respondents said intercloud application mobility was "essential."


The financial industry excels at managing cloud costs better than other industries.
One of the factors driving the growth of hybrid cloud is the issue of IT cost management.

Organizations using the public cloud reported spending 26% of their annual IT budgets on the public cloud, and they expect that share to grow to 35% within the next two years.

While 36% of all companies surveyed said they were spending more than they budgeted on public cloud, 33% of financial industry respondents said they were over budget, indicating that they are making better use of their public cloud spending than other industries.


Lack of hybrid IT technology capabilities
While 88% of respondents expect hybrid cloud to have a positive impact on their business, IT organizations find it extremely difficult to acquire hybrid cloud skills. This skill was ranked as the second scarce skill, behind AI and machine learning.

In the financial services industry, a higher proportion of respondents said they had a shortage of technicians across all technology areas except AI and machine learning compared to other industries.

Meanwhile, 91% of financial services companies responded that hybrid cloud is the ideal IT model. This confidence in hybrid cloud and its high industry-specific adoption rate confirm the financial services industry's need for digital innovation.

However, private cloud adoption rates were low compared to the global industry average. This suggests that some financial services are undergoing transformation and that modernizing existing legacy infrastructure is generally complex.

“Fierce competition and increasingly stringent regulatory compliance are driving the entire industry to re-evaluate the capabilities and relevance of their existing IT infrastructure,” said Kim Jong-deok, Country Manager of Nutanix Korea. “Today’s customers want personalized, tailored services delivered where, when, and how they want.”

He continued, "While it's positive that the financial services industry is recognizing these customer needs and the benefits of cloud infrastructure, it's worth considering that only 20% are actually taking action." He predicted, "It will likely take a long time to ultimately achieve customer experience while satisfying increasingly sophisticated and demanding customers."

Commissioned by Nutanix and conducted by Vanson Bourne, the ECI report surveyed over 2,300 senior IT decision-makers from mid-sized and large enterprises worldwide, including 333 financial services firms. The survey examined the current and planned locations of business applications, cloud-related challenges, and how cloud strategies compare to other IT projects and priorities. Participants represented companies of various industries and sizes across the United States, Europe, the Middle East, and Africa (EMEA), and the Asia-Pacific region, including Korea.