Software-as-a-Service (SaaS) Solutions to Transform Banking and Insurance within Five Years
LONDON — New survey findings from SAP SE (NYSE: SAP) and analyst firm Ovum reveal a surging demand for cloud technology among retail banks and insurance companies. Software-as-a-Service (SaaS) solutions are now being considered in almost all new IT investment projects. The research was unveiled at the SAP Financial Services Forum London, being held September 9-10 in London.
“The findings reveal a new maturity for cloud computing in the financial services industry,” said Daniel Mayo, chief analyst of Ovum. “The cloud is now a growth driver for banks and insurers, rather than a medium just for bringing costs down. They are buying SaaS solutions to simply operations, develop better products and quickly enter new markets. The industry has made it clear that SaaS will radically change the banking and insurance landscape.”
Banks and insurers face increasing pressure from new competitors, tighter regulatory requirements and highly sophisticated customers. These companies now realize that the cloud can create efficiencies and protect their competitive position, especially in the case of SaaS. Previously restricted to horizontal functions, the study reveals that SaaS is already supporting a majority of functions within the line of business as evidenced by 42 percent of banks and 36 percent of insurers.
Highlights from the survey include:
- IT decision makers in retail banks expect to see the greater future investment in cloud. In total, 42 percent expect SaaS spend will “increase significantly” over the next 18 months, compared to 33 percent among insurers.
- SaaS is the preferred option for 27 percent of banks and insurers, with a further 42 percent considering it for every IT project.
- Within the lines of business, 49 percent of decision makers expect SaaS to see increased or significantly increased investment over the next 18 months. This will be focused most heavily on operational functions within insurers and delivering growth objectives for banks.
- Among IT decision makers, 80 percent agreed with the view that SaaS enables organizations to respond more rapidly to market opportunities. Another 79 percent agree that SaaS makes it easier for new entrants to the market.
- Banks and insurers see concerns over regulatory compliance (36 percent), concerns over reliability and availability (35 percent) and the difficulty of integration SaaS with existing systems (31 percent) as the most important barriers to the greater adoption of SaaS.
Phone surveys were conducted with IT decisions makers in 400 banks and insurance companies from North America, Europe, Asia Pacific, the Middle East and Latin America.
SAP at the Forefront of Bringing the Cloud to Financial Services
The survey results reflect SAP’s strength in combining the cloud portfolio with legacy industry experience.
“SAP is leading the charge in making the cloud accessible to financial enterprises,” said Ross Wainwright, global head of Financial Services at SAP. “We can provide a cloud experience that modernizes business processes to unique specifications of the customer, be it public hybrid or managed cloud.”
To help customers quickly deploy the public, private or hybrid cloud infrastructure of their choosing, SAP has created a dedicated Industry Cloud organization that offers technologies and expertise. It employs SAP HANA® Enterprise Cloud, a fully managed, subscription-based cloud service for running real-time, mission-critical applications imbued with Big Data analytics.
SAP has one of the broadest and most comprehensive industry leading portfolio in cloud solutions which runs human resource (HR), sales and procurement functions. It can manage core banking and insurance operations in the cloud and facilitates next-generation payment solutions through innovative technology such as SAP® Financial Services Network, a cloud-based solution designed to simplify and speed interaction between corporations and financial institutions. End-to-end integrated packages that are also offered allow financial services companies to better benefit from the cloud and to leverage existing on-premise systems in the mix.
Ovum is a leading global technology research and advisory firm. Through its 180 analysts worldwide it offers expert analysis and strategic insight across the IT, telecoms, and media industries. Founded in 1985, Ovum has one of the most experienced analyst teams in the industry and is a respected source of guidance for technology business leaders, CIOs, vendors, service providers, and regulators looking for comprehensive, accurate and insightful market data, research and consulting. With 23 offices across six continents, Ovum offers a truly global perspective on technology and media markets and provides thousands of clients with insight including workflow tools, forecasts, surveys, market assessments, technology audits and opinion. In 2012, Ovum was jointly named Global Analyst Firm of the Year by the IIAR.
Ovum is a division of Informa plc, one of the leading business and academic publishing and event organisers globally, headquartered in London. Informa is quoted on the London Stock Exchange. For more information, visit www.ovum.com.
As market leader in enterprise application software, SAP (NYSE: SAP) helps companies of all sizes and industries run better. From back office to boardroom, warehouse to storefront, desktop to mobile device – SAP empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition. SAP applications and services enable more than 253,500 customers to operate profitably, adapt continuously, and grow sustainably. For more information, visit www.sap.com.
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