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  • Seven in ten (77%) financial services SMEs believe cloud services will be a central part of their business in the next five years
  • Over half (54%) of finance SMEs have invested in the cloud since March 2020
  • Small finance businesses say this investment has helped improve their profit (35%), increased productivity (33%), and made their business more flexible and agile (25%)
  • The cloud has also enabled better customer experiences (36%), improved procurement processes (36%) and allowed finance SMEs to feel more prepared to manage IT infrastructure as the business grows (33%).
  • However, data protection is still a concern, with 38% still worried that data protection is compromised when using cloud services

New research from IONOS has found that over three quarters (77%) of financial services SMEs believe cloud services will be a central part of their business in the next five years but data protection in the cloud continues to cause concern and could stagnate future adoption.

The research demonstrated that many finance SMEs have digitally transformed following the pandemic and are eager to continue driving further benefits. A further seven in 10 (71%) say they are using more cloud services than pre-pandemic, and over half of those asked (54%) say they have invested in the cloud since March 2020.

Conducted by Censuswide on behalf of IONOS, a European provider of cloud infrastructure and cloud services, the research polled IT decision makers at 202 Finance and Fintech SMEs to get their views on the use of the cloud in their business, including the benefits it has brought to their organisation.

Despite this eagerness from SMEs to digitally transform however, 60% still view their business as lagging behind when it comes to adopting cloud services and only 12% perceive their business as having optimised cloud usage. On the cloud maturity model from the Open Alliance for Cloud Adoption, this is the highest level, where the cloud is an established part of the business model, with a mix of cloud operations leveraged to improve efficiency.

When it comes to the maturity of cloud adoption across departments, unsurprisingly IT infrastructure came out on top as having the most optimised cloud usage, with 17% viewing the department as operating at an optimal level, while marketing was considered the least optimal.

Benefits from cloud investment

Despite this current gap in terms of adoption and future investment, the results did reveal that finance SMEs investing in the cloud post-pandemic have reaped rewards, helping to improve profit (35%), increase productivity (33%) and make their business more flexible and agile (25%).

When asked what the cloud has enabled them to do that they couldn’t previously, SMEs reported it helping them to deliver better customer experiences (36%), improved procurement processes (36%) and being better prepared to manage IT infrastructure as the business grows (33%).

Data protection is still a concern

However, despite viewing the cloud as central to their future business plans, data protection and security measures continue to cause concern for SME IT leaders. The research found that 38% are still worried that data protection is compromised when using cloud services, and over half (55%) are concerned that security threats are increased by cloud services.

When exploring what they look for when sourcing a cloud provider, only 23% considered strict adherence to data protection a key quality – showing that despite data protection being a concern, SMEs in the finance sector may not recognise the role cloud providers can play in protecting the business.

Looking at the impact on the wider business, three in ten (31%) consider ensuring data protection measures are being followed as one of the biggest challenges when implementing cloud services into the business.

Peter Prahl, SVP International and Digital Cloud at IONOS commented on the results: “Many modern financial services businesses are depicted as progressive with digital innovation and the cloud goes hand in hand with supporting this vision. The data shows that financial businesses have not only invested in the cloud in recent years, but now feel it is central to the future of their business.

“For financial services businesses, this can lead to benefits like scalability at pace as well as cost savings. However, the most important improvement for these businesses is enhanced security. This industry plays a trusted role for other organisations and consumers, and given the current economic situation, financial services businesses need to ensure they can safely and securely protect those they are supporting.

 

“While it can feel like a leap of faith to put all the businesses trust in a cloud service provider, working closely with a cloud provider is one way to minimise risk. Cloud service providers can help to monitor and mitigate DDoS attacks, ensure a safe and secure back up and support with up-to-date expert knowledge on legislation.”

 

For more information on IONOS, visit: https://cloud.ionos.co.uk/