Survey by Temenos and TechMarketView reveals banks sceptical on cloud computing

Despite its recent high visibility, the concept of cloud computing has yet to gain real support among banks, many of which are concerned about security and potential risks of a technology they view as immature. As a result, banks have been slow to adopt cloud computing in a production environment, although bankers accept its potential for cost savings. These findings result from a survey of business and technical banking executives conducted by independent research firm TechMarketView in conjunction with core banking systems provider Temenos at Temenos' annual client forum in Monaco this May.

According to the survey, 44% of bank executives see the lack of data security as a significant barrier to the adoption of cloud computing. Reflecting the underlying lack of maturity and confidence in cloud computing, only 15% of respondents are running cloud applications today. The survey showed that 80% of respondents could not name a leader of cloud computing in the banking sector - although Temenos featured among the vendors that were cited by bankers.

Respondents showed a surprisingly good understanding of cloud computing describing it as 'commodity' computing resources accessible over the internet at lower cost, with both business and technology executives consistent in their views.  Nearly half of the banking executives see cloud computing as means to cut infrastructure costs, while over a third thought it would give more cost flexibility. However, a further one third of executives admitted they simply 'didn't know enough' about the potential risks.

Commenting on the survey, Koen Van den Brande, Group Strategy and Marketing Director, Temenos, said: "We recognise that cloud computing is an important emerging trend and wanted to gauge customer opinion. In their responses, banks appear to remain skeptical today.  This is an interesting finding and is broadly in line with other reports on the cloud computing subject. This finding would seem to infer that it is likely that adoption may be slow in banking until some of the critical issues are resolved. Nonetheless, Temenos continues to advance its thinking in this area and will closely monitor customer demand to ensure our software delivery options are well aligned with the market."

The research comes from the analysis of data collected from business and technical banking executives attending the Temenos Client Forum in May 2009. Half the participants were C-level executives, with the remainder a mix of IT management, project managers, department heads and IT architects. The majority of respondents worked for mid-market banks (assets of between $10-$250 billion), the most prevalent (nearly 40%) classing themselves as universal banks.

Koen Van den Brande, Group Strategy and Marketing Director, Temenos and Anthony Miller, Managing Partner, TechMarketView will be available for briefings to discuss the cloud computing trend in banking and the results of the survey.

-ENDS-

Founded in 1993 and listed on the Swiss Stock Exchange (SWX: TEMN), Temenos Group AG is a global provider of banking software systems in the Retail, Corporate & Correspondent, Universal, Private, Islamic and Microfinance & Community banking markets. Headquartered in Geneva with 52 offices worldwide, Temenos serves over 700 customers in more than 120 countries. Temenos’ software products provide advanced technology and rich functionality, incorporating best practice processes that leverage Temenos’ experience in over 600 implementations around the globe. Temenos’ advanced and automated implementation approach, provided by its strong Client Services organisation, ensures efficient and low-risk core banking platform migrations. Temenos annually invests around 20% in R&D, significantly more than its peers, into a single fully packaged upgradeable software release, which ensures all Temenos customers benefit from modern technology and support indefinitely. Temenos is top of the IBS Sales League Table 2008, winner of the Best Core Banking Product category in Banking Technology magazine’s Readers’ Choice Awards 2008, winner of the Financial-i Leaders in Innovation award for the most innovative core banking systems solution 2008 and is listed in the American Banker top 100 FinTech companies.

About TechMarketView

TechMarketView LLP provides authoritive research and analysis on the technology scene. Founded in 2008 by Richard Holway and Anthony Miller, TechMarketView has the most respected team in the sector. As well as bringing you the acclaimed UKHotviews, TechMarketView provides subscribers with a range of in-depth analysis, market sizing and forecasts with particular emphasis on the UK software and IT Services sector. Sign-up for your daily dose of UKHotViews at www.techmarketview.com. Banking in the Cloud is available to clients of TechMarketView's annual subscription service.


For more information, contact:

Max Chuard
Temenos
Director, M&A & IR
Member of the Executive Board
Tel: +41 (0) 22 708 1157
Email: mchuard@temenos.com

Ben Robinson
Associate Director, IR & Business Strategy
Tel: +41 (0) 22 708 1535
M: +41 795 207208/ +44 7803 887929
Email: brobinson@temenos.com

Petra Shuttlewood
Temenos PR Manager
Tel: +44 (0) 207 423 3751
Email: pshuttlewood@temenos.com

Evelina Amanatidou Team 660
Metia for TEMENOS
Tel: +44 (0) 20 3100 3592
Email: evelina@metia.com