Enterprises in the banking, financial services and insurance (BFSI) sector are increasingly adopting cloud-based solutions to minimize risk, maximize output and offer innovative service delivery methodologies to customers. As a result, the cloud computing market in Asia-Pacific is estimated to grow at a compound annual growth rate (CAGR) of 7.7% to reach US$191.8bn in 2024, says GlobalData, a leading data and analytics company.
Anshuma Singh, Technology Analyst at GlobalData, comments: ‘As enterprises in the financial sector continue to embrace digitalization, they are increasingly emphasizing on leveraging and integrating advanced technologies and business models to disrupt financial services offering capabilities across the region.’
An analysis of GlobalData’s Market Opportunity Forecasts Model reveals that cloud revenue in the BFSI sector will grow at a CAGR of 8.2% during 2019-2024 to reach US$27.8bn in 2024. Indonesia, South Korea, Japan, Singapore, Australia and New Zealand will witness the highest CAGRs during the forecast period.
China and India are home to the early adopters of financial technology (FinTech) in the region. Strong growth in the FinTech investment by the emerging countries including China, Japan, Australia, South Korea and India will boost the revenue contribution of the BFSI sector in the Asia-Pacific cloud computing market.
Ms Singh continues: ‘The growing popularity of digital payment solutions including in-store mobile payment platforms, e-Wallets and peer-to-peer payment systems among end-users has a significant impact on the development of the FinTech ecosystem in the Asia-pacific region.’
Banks continue to foray partnerships with FinTech to gain from the digital disruption. Major Chinese banks like China Construction Bank, Industrial and Commercial Bank of China, Bank of China partnered with Alibaba’s FinTech arm Ant Financial and Tencent Holdings for services like e-payments, deposit-like funds, and big data-assisted consumer lending services.
Government regulations related to FinTech in the APAC region are restricting its growth. Additionally, personal data protection regulations need to be adhered by the financial service providers. For instance, under the banking act in Singapore a financial body is restricted from revealing its customer personal data without customer consent. Therefore, several financial firms are reluctant to migrate to the cloud or partnering with the third-party players (TPPs) due to data security reasons.
Ms Singh concludes: ‘The financial sector enterprises continue to embrace cloud services to reduce costs and manage large volumes of data with enriched security and accessibility features. The integration of cloud computing into banking solutions is anticipated to play a crucial role in transforming the banking sector in the forthcoming years.’