Financial institutions are moving from old data centers to hybrid cloud because it’s faster, safer, and more flexible. Cloud helps them modernize, cut costs, stay resilient, and compete with digitalfirst players. This collaborative cloud journey helps firms modernize their core systems, reduce costs, and strengthen security while ensuring long‑term digital readiness. 

Financial services firms are faced with a complex business landscape

Today’s financial services firms operate in an era of disruption defined by a complex and ever evolving business environment. Rapidly changing customer needs, mounting economic pressure, a rise in agile competition and growing regulation are just some of the key challenges to be tackled in order to thrive in this modern landscape. 

However, financial institutions are heavily invested in legacy infrastructure that is not flexible or scalable, posing challenges in terms of time to market, cost of operations, and security risk.  

We recommend a hybrid, multi-cloud setup to digitally transform the core while optimizing the cost base. Hybrid cloud has the potential to replace large capital expenditures with recurring monthly expenses (capex to opex). What’s more, hybrid cloud environments offer more security when compared to on-premises infrastructure. 

We understand that cloud adoption is not a one-time investment/engagement, but rather a complex, multi-year commitment with a lot of moving parts. Your IT investments should be guided by your business ambitions. What, how, and when to move applications, middleware, and platforms? Public cloud, private cloud, or hybrid? 

Key drivers accelerating cloud adoption in financial services

1. Reinventing the value chain with embedded financial services 

The relationships between financial institutions and their customers are evolving. As the supplier ecosystem is growing, more companies are embedding financial services in their offerings. Competition and digital transformation propel them to reimagine their core processes to achieve customer differentiating capabilities through modern day technologies such as ML and AI. 

2. Strengthening risk and resilience in a volatile environment 

The world gets simultaneously less risky and more dangerous. The benefits of safer cars and workplaces are offset by new risks associated with climate change, cybercrime, distributed supply chains, and the pandemic. For example, Know Your Customer’s (KYC) process during the pandemic required a lot more effort from financial institutions, while the regulatory requirements remained the same. 

3. Competing with agile, cloud native entrants 

Existing legacy providers must now compete with new age players that have a cloud-native, agile and experience led approach. Modernization and open ecosystem collaboration are essential to thrive in this new environment. 

4. Responding to economic headwinds and digital demand

Customers are moving to digital banking services for easy accessibility and multiple features on the go. This requires banks to become innovative and offer services at an affordable cost while maintaining operational efficiency. Already faced with the current economic headwinds, there is a significant possibility of increased revenue and cost pressures. 

Six Strategic Priorities for Financial Institutions 

1. Selling digitally to enhance customer experiences

A shift from traditional channels to digital tools to enhance customer experience, prospects, and delight. New channel partnerships help maximize their reach. 

2. Building a future ready sustainable enterprise

Enterprise technology must continuously evolve with demand for efficiency, industry opportunities, and risks to remain sustainable. 

3. Modernizing the data estate and core infrastructure 

Financial institutions need to reinvigorate enterprise data assets for an “insights driven” culture, modernizing the mainframe and digitalizing the core. 

4. Delivering touchless, omni channel customer service 

Banks need to differentiate their brand with minimal CX friction across omnichannel services, digitalizing operations for STP. 

5. Enabling intelligent, insight driven businesses

Leveraging data effectively for hyper personalization and driving analytics/AI led innovation across the value chain. 

6. Driving operational efficiency with automation 

Cost transformation, next-gen operating models, process optimization and higher automation levels are nonnegotiable. 

Modernization as the foundation for digital transformation

An evolving tech and infrastructure stack is essential to power innovation, deliver enhanced outcomes, integrate with partners, and generate value. Hybrid multi-cloud setups enable this. 

Firms can redirect time spent on manual, repetitive tasks toward strategic and innovative priorities. Becoming future ready means shifting from legacy to cloud first solutions that support long term business vision.

Harness the power of the cloud with Capgemini 

Capgemini blends end-to-end cloud services, sector expertise, and partnerships with global hyperscalers to guide every step of the cloud journey. We help integrate legacy systems with secure hybrid and multi-cloud solutions, enabling a fully digital, future ready operating environment. 

Before embarking on the cloud migration journey, businesses need a clear business case, an understanding of the risks, and our experts recommend a phased approach with clear goals and objectives to enable your firm’s digital hybrid future.  

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FAQs 

Financial institutions are shifting to hybrid cloud to gain agility, reduce operational costs, improve scalability, and strengthen security—capabilities that legacy data centers struggle to offer.

Hybrid cloud combines private and public cloud environments, giving banks the control they need for sensitive data while benefiting from the flexibility and cost-efficiency of public cloud services. 

Common challenges include integrating legacy systems, ensuring cybersecurity, meeting regulatory requirements, managing cost expectations, and aligning cloud adoption with long term business goals. 

Cloud enables faster product launches, better digital services, always on customer support, and more personalized experiences through analytics and AI leading to smoother, more connected customer journeys.

Capgemini provides end-to-end cloud expertise, modernization services, and strong partnerships with global hyperscale’s to help institutions securely migrate, integrate, and optimize hybrid cloud environments.