Cloud banking platform Mambu has partnered with research and advisory firm Celent to produce a joint report for financial institutions on migrating to cloud-native core platforms.
Software-as-a-service (SaaS) cloud banking platform Mambu has released ‘The Tipping Point for Core Migration‘ report in collaboration with advisory firm Celent. The report uses Celent IT spending data alongside Mambu core platform spend benchmarks to analyse the possible savings of switching to the cloud as opposed to continuing to run existing legacy systems.
According to Mambu’s report, banks globally could save up to $246.1billion by running a cloud-native core over a five-year period.
The report also highlights that the global five-year cost of running a legacy core platform totals around $323.2billion whereas the cost of running a cloud-native core platform over the same time period would cost £77.1billion; therefore totalling the saving of $246.1billion.
The saving comes from a variety of factors including a significant reduction in up-front costs (up to 50 per cent); with an even larger proportional saving coming from the reduction of recurring costs over the five-year period (82 per cent).
Celent also explains that a progressive transition into a cloud-native core may also not be helpful to financial institutions, as the cost of running multiple systems that require dedicated resources could make the process more costly. This was also paired with the ability to be faster at adapting to new system modifications in the future when operating with cloud-native systems to show the benefits of leaving legacy systems in the past.
The benefits of running a cloud-native core may not be limited to reducing costs, as Mambu also suggests that cloud migration could increase the speed-to-market for companies by up to 85 per cent.
Craig Focardi, a principal analyst at Celent, explained: “The modernisation of all banks is no longer an ’if’ but a ‘when’. Although not all banks will be modernising in the same way, financial institutions should be taking notice of the shift to a cloud core.
“In addition to being more affordable to integrate and operate than legacy systems, moving to the cloud enables banks to adapt fast, whether it is through product offers or system modifications. This alone will become invaluable as the market grows ever more competitive.
“Our analysis with Mambu really highlights that the need for a cloud-native approach has never been greater – for both banks and their consumers.”