The Cloud Fear Factor in Financial Services

Michael Vizard

When it comes to new technologies, the financial services sector is usually first in line in adoption.


But a new survey from LogLogic, a provider of log analyzer software, shows that financial services firms may not be all that excited about cloud computing.

LogLogic surveyed 82 financial services companies from around the globe; with 34 percent of them saying that cloud computing was not a strategic priority at the moment. Another 26 percent said their companies were generally risk-averse to cloud computing, while 17 percent their company is slow to adopt new technology and 8 percent said there was too much hype.


Now the financial services industry encompasses everything from Wall Street titans to relatively staid insurance companies. But Bill Roth, chief marketing officer for LogLogic, notes that data governance and security issues are always top of mind in these environments. That means that until progress is made on cloud computing security and data governance issues are firmly addressed, cloud computing adoption in this sector might see slower adoption than, for example, midmarket companies that are by comparison short on IT resources.


Cloud computing as a whole is still in its infancy. But unless IT moves quickly to address security and data governance issues, it may be a while before cloud computing reaches adolescence.

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Jun 21, 2010 11:30 AM Larry Fisher Larry Fisher  says:

There's a term in the electric vehicle community, "Range Anxiety," for users' concerns about driving too far from home base because of the difficulty of finding a charging station in the field. It seems that many companies have Range Anxiety about posting their data and applications too far away from home base as well.

Jun 28, 2010 1:07 AM Darren Cunningham Darren Cunningham  says:

I found some of these statements about the financial services industry to be somewhat vague so I clicked everywhere I could (without having to register) to try to understand the results of the survey.

The press release helped clarify a few things, but there are gaps:

1) "34 percent of respondents believe that cloud computing is not strategic to their company" - does this mean that 66% see it as strategic? Kind of reminded me of the Churchill quote: "Statistics are like a drunk with a lamppost: used more for support than illumination."

2) Was the term "cloud" clearly defined for respondents? I'm assuming that because it's an IT survey, the reference is to infrastructure as a service (IaaS) and not not so much software as a service (SaaS), because financial services firms of all sizes continue to invest in SaaS applications like Salesforce CRM and Informatica Cloud - whether centralized IT is involved or not.

Don't get me wrong, I completely agree with your point about the need for a continued focus on IT governance and security when it comes to the adoption of cloud computing (not to mention data integration),  but it's not clear to me that the numbers presented (without more context) fully support the headline.

Sep 27, 2010 8:05 AM we are cloud we are cloud  says:

thanks for the informative post. to expand on the points you made about financial service's fear of cloud computing I thought you might be interested in the opinion of Rick Porting, a SAP consultant, and his views on some of reasons why people are scared of the cloud, and the facts that they overlook.


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