Cloud and cost control. It fits like a glove, doesn't it? I read with interest in the Ovum report, "The Critical Role for Cloud in the Transformation of Retail Banks", that there has been a shift in the attitudes and priorities of retail banks today. IT cost control is still king. But, as organisations want to react more quickly to internal pressures and external change, agility is another strong contender for IT benefit of the year.

With rapidly developing customer expectations, growing competition, and constraints on IT budgets, it's no surprise that traditional IT has become unsustainable. SaaS seems a logical progression, but what do banks really want? Ovum pinpoints the reduced need for internal development as the top priority. This is followed by the need to free up the IT team to focus on strategic projects, and the ability to support more flexible business processes.

In a nutshell: companies want the freedom to adapt and innovate. Yet, while the report confirms that SaaS is recognised as a means of overcoming barriers to change, it's no magical solution. Factors limiting its adoption include regulatory and compliance issues (a top priority for 36.4% of respondents), as well as concerns over reliability and availability (highlighted by 35.9%). Over a third of companies still view SaaS as "too risky", whereas just under a third cite difficulty in integrating and understanding it. Some significant hurdles are still very much in place.

Banking is a highly regulated industry, so it's no surprise that compliance is a major priority. Interestingly, Ovum believes this situation is evolving and will be largely resolved over the next three years, particularly as governments and the public sector take the lead and adopt cloud technology themselves. One thing does seem certain though: adopting cloud once put companies ahead of the curve. Without it, they may soon find themselves behind it.

The Ovum report, "The Critical Role for Cloud in the Transformation of Retail Banks," can be downloaded here.