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The Year of the Cloud in Banking [a report by Kochański & Partners]

1 July 2020

The banking sector has declared the year 2020 to be the “year of the cloud”. Not long ago, the Polish Bank Association (ZBP) estimated that it would take banks two to five years to make the transition from an early adoption phase to the phase of mainstream use of cloud computing. Today, there is no longer any doubt that investments by technology giants, a more lenient regulatory approach to cloud deployments and the coronavirus pandemic will significantly accelerate this process.

”Cloud cover” in Poland

According to Eurostat data, only 20% of Polish companies use cloud computing. We are far behind the European leader – Finland, where cloud solutions are used by 65% of businesses. Nevertheless, the sales of cloud computing solutions in Poland are expected to grow dynamically. This will be facilitated by investments from global technology giants such as Microsoft and Google, who set to invest billions of dollars on cloud computing development in Poland.

Cloud computing technology offers many benefits such as reduction of IT costs (from 20% to  50%) and significant acceleration of processes like data analysis or preparation of reports. For many companies, cloud is also an important means of implementing the digital transformation of their infrastructure. In line with this, an increasing number of organisations, including from the financial sector, state they are planning to implement a cloud strategy in the coming years.

Cloud computing in banking

Until now, banks treated cloud computing solutions with some reserve due to concerns about cybersecurity. However, the pandemic has forced a rethinking of their approach. Indeed, recent weeks have seen a significant acceleration in the implementation of cloud projects in banks, driven by the need to adapt infrastructure to the new reality. Clearly, data security remains vital, but it no longer presents a significant barrier to the cloud.

The Polish Financial Supervision Authority (KNF) has also recognized the growing importance of cloud computing. On 24 January 2020, it published a communication presenting guidelines, recommendations and explanations to enable banks in Poland to efficiently and effectively implement cloud services.

The transition of Polish banks to the cloud is also being facilitated by the “Cloud Computing Implementation Standard”, the so-called PolishCloud, developed by experts from Kochański & Partners in cooperation with representatives of banks and Accenture under the auspices of the Polish Bank Association. This contains a practical review of all existing legislation related to cloud computing services for the financial sector and is thus an invaluable tool and roadmap for banks and financial institutions.

Education first

Education is the first and crucial step to effective implementation of cloud computing technology in Polish banks. In the strictly regulated financial sector, it is essential that the entire organization – IT departments, managers, legal and compliance departments, architects and HR staff – understand how cloud computing works. However, surveys reveal that many companies lack competence and knowledge in the field of cloud solutions. Hence the PolishCloud Academy initiative, created by the Polish Bank Association in cooperation with its partners:  Google, Microsoft, Operator Chmury Krajowej, Accenture and Kochański & Partners. This is the largest free series of courses for bank representatives in Central and Eastern Europe, designed to prepare the financial industry for the upcoming technological and organizational changes on the horizon.

European banks in the cloud

Cloud deployment is nowadays a priority to maintain competitiveness in the financial market. Many European banks already use cloud computing, which contributes to their efficiency and coordination within the organization. BBVA, a Spanish multinational banking group, through its investment in cloud technologies, has created a cooperation platform for its employees. With cloud computing, Moneta Bank, the largest Czech bank, has gained a flexible infrastructure to quickly implement changes and respond to customer demands.

A particularly interesting situation can also be observed in Italy, where Intesa Sanpaolo bank recently announced its cooperation with Google, with the ambitious goal of building an innovative technological infrastructure in Turin and Milan.

Banca Transilvania has also followed suit, adopting a cloud solution enabling it to save a total of 41 working days in the risk and security department. The Romanian bank has also introduced an automated customer service system, thus streamlining and improving customer service and making considerable financial savings.

Polish banks are slowly reaching the clouds

In Poland, Idea Bank was the first bank to implement advanced cloud technologies. Through the transition to the Office 365 environment, bank employees can make use of the latest cloud solutions. PKO BP, the largest Polish bank, also announced the transfer of applications to the cloud. This decision stems from the Road to Cloud strategy defined at the beginning of 2020, based on which a map was developed for migration to the cloud in a hybrid multi-cloud architecture. With the use of cloud technologies, PKO BP wants to build the safest and most comprehensive solution for its customers and provide a versatile platform of banking services, products and payments, enabling businesses to create a virtual company in the cloud.

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Liderzy Sektora/Praktyki Financial Services

Rafał Rapala

Rafał Rapala

Senior Partner

Head of Practice

phone +48 22 326 9600
mobile +48 608 444 650
r.rapala@kochanski.pl

Financial Services