Financial services firms hesitant to adopt cloud computing

Today’s financial services firms are avoiding popular IT infrastructure investments such as cloud computing, in large part due to data security and transparency concerns, according to a survey of 82 of the world’s largest banks, investment houses and insurance companies by LogLogic.

The survey, which sought to uncover the top information technology and security priorities for today’s financial services companies, found that essential IT functions, such as security and compliance, continue to be the top concern for IT departments industry-wide.

While the financial services market has traditionally been a leader in adopting cutting edge information technology, few financial services companies said that they have plans to invest in new technologies, like cloud computing, this year.

In particular, the survey found that:

• 34 percent of respondents believe that cloud computing is not strategic to their company, while 26 percent of respondents believe their company is risk-averse to cloud computing
• 58 percent of respondents only plan to invest in essential IT functions, such as security and compliance
• More than 75 percent of respondents are concerned about increasing government regulation.

“While the cloud holds many benefits for the enterprise, we’re not surprised to see that financial services firms are hesitant to adopt cloud computing,” said LogLogic CEO Guy Churchward. “There are still many lingering questions about data security and transparency in the cloud, and it’s up to cloud providers to offer visibility into these practices before we see mainstream adoption from financial services firms.”

Survey respondents were asked to share information on compliance, security and the allocation of their overall IT budget. Companies surveyed ranged from small and medium businesses with less than $250 million in annual revenue, to large enterprises with more than $1 billion in annual revenue.