Cloud-powered banking is live, and producing enormous value

More profitable, more resilient, more cyber-secure

Cloud technology is becoming an essential tool in the banking and capital markets sector after proving its worth during the pandemic’s interruptions.

In PwC’s 2023 Cloud Business Survey, 95% of banking and capital markets respondents say they are now, or will be in two years, fully on the cloud.


All-in on cloud and have scaled it throughout the business


Adopted cloud in many parts of the business, evolved operating model


Started implementing cloud in some parts of the business

Q: Which of the following best describes your company’s cloud maturity? Source: PwC 2023 Cloud Business Survey, January 2023: base: 144

We see with our clients that the pandemic opened many eyes to the wide range of possibilities with cloud. That could be as simple as mobile check deposits or as complex as responding to fast-moving geopolitical and cybersecurity events. And with new stresses recently appearing in bank funding and risk management, greater data transparency and operational flexibility may help leaders better manage an institution’s complex flow of funds.

Confident in digitization’s power to bring about a faster and more responsive organization, leaders are now looking to engineer the cloud into every part of the business.

“We’re seeing larger transformation and modernization efforts of big corporate platforms: financial systems, human capital systems, payment systems. Firms are constantly looking at how to change the technology fabric of the business.”

- Scott Evoy, Principal, banking and capital markets, PwC

But our survey also illustrates a wide gulf between banks. Adopting cloud or running parts of the business in the cloud is not the same as being a cloud-powered bank. What does cloud-powered mean?

The cloud-powered bank

Cloud-powered companies in our survey are the ones that moved to a digital operating model and are achieving measurable value across 12 cloud transformation metrics such as better decision-making, productivity, or cybersecurity.

Twelve percent of banking and capital market respondents in our survey merited being called cloud-powered because they are extracting ROI from the cloud at a pace that’s well ahead of their peers.

The enhanced ROI for cloud-powered companies may explain why they are more likely to predict stronger revenue growth versus their peers. Forty percent of cloud-powered companies, compared to 24% of the rest of the survey population, say they expect 15%+ revenue growth over the next 12 months.

The rosier projections may be because cloud-powered banking operations open new avenues for top-line growth, whether that’s in APIs and open banking, embedded loans or banking-as-a-service.

Additionally, a cloud-powered bank’s agile operations could quickly turn a front-line employee’s insight into a viable, revenue-generating product that’s in the market well before the competition.

“We haven’t always had the opportunity to think creatively in banking, and we haven’t always had the tools to make those ideas a reality. But now we have the tools and the ideas, and technology makes them possible.”

- Musi Qureshi, Principal, digital banking PwC

We believe that banks embracing digitally powered creativity are the main competitive threat to other institutions in the near-term, more so than fintechs or large consumer brands. (See Next in banking and capital markets 2023). For example, by using data and analytics to produce insightful advice tailored to each individual client, banks with enhanced digital capabilities can demonstrate to potential customers the benefits of switching institutions.

Yes, we’re getting measurable value from cloud

Cloud-powered companies
Non-cloud powered banking and capital markets firms

Improved decision-making
Improved resilience
Improved profitability
Enhanced customer experience
Cost savings
Increased productivity
Faster time to market
Increased agility
Enhanced stakeholder trust
New revenue streams
Improved cyber posture
Product and services innovation

Q: Which of the following best describes how cloud technology is, or is not, delivering measurable value in your organization? (Response to 'Already achieved measurable value') Source: PwC 2023 Cloud Business Survey, January 2023: bases: 127, 95

How to build a cloud-powered bank

How did cloud-powered banks become cloud-powered? Our survey provides insights into the decisions and changes that firms should consider if they want to achieve similar results.

The cornerstone of being cloud-powered is being all-in on cloud and using a cloud business model. In and of itself, the cloud is viewed as the competitive advantage.

However, migrating workloads to the cloud is not enough to achieve cloud-powered status.

Our survey indicates changes to corporate culture are likely to be part of the process of transformation.

The cloud-powered companies in our survey share four value-creation characteristics. They are the “how to” guide for achieving measurable value from digital transformation.

icon cycle

Cloud-powered companies don’t take a linear approach to cloud, going from workload migration to asset modernization to cloud native development. Instead, they take a combination approach, applying the method that makes the strongest business case for their goals. And once they decide, they’re committed. Cloud-powered companies are nearly four times as likely as other companies to sustain their current strategic focus.

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CIOs and tech teams at cloud-powered companies know that transformation is a group effort. They’re more likely to be in sync with key business functions at the earliest stages of planning, budgeting and requirements gathering. They prioritize their partnership with the CHRO. And across the C-suite, CIOs at cloud-powered companies have stronger alliances in service of transformation projects than CIOs at other companies.

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Data strategy
Executives at cloud-powered companies understand that data is at the heart of transformation efforts. And they should address the all-too common issue of siloed and mushrooming data that is untapped and ungoverned. Cloud-powered companies are much more likely to have an enterprise-wide data strategy than their peers (88% versus 59%).

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Trust and controls
Cloud-powered companies think about the specific, potential risks that cloud poses throughout all stages of transformation projects. Across all eight dimensions we evaluated, they are more advanced than other companies when it comes to adopting leading practices. They focus on a range of issues, including cybersecurity, data privacy and compliance.

Source: PwC 2023 Cloud Business Survey, January 2023

Common pitfalls to realizing value from the cloud

Transformation is a complex initiative, and the survey’s findings highlight common difficulties we often hear from banking and capital markets clients.

The biggest barrier to achieving value? Challenges in using cloud service providers.

That may not be surprising as 69% of respondents use a hybrid cloud approach involving multiple providers, which adds complexity and operational risk.

The second- and third-ranked barriers are an inability to quantify ROI and budget/investment constraints.

Reframing the common pitfalls, what our survey finds is that banking and capital markets companies want cloud services and solutions to be easier to use, have a clearer investment payoff and to cost less to implement and maintain.

Industry cloud for banking’s growing role in transformation

Industry cloud for banking solutions are seeking to meet those three needs and many others.

Industry cloud for banking solutions gather together the regulatory and cyber compliant software, system integrations and coding that help speed up the completion of digital banking projects, in turn reducing costs.

 In our survey, industry cloud for banking users say:

  • Cyber security and privacy controls are better tailored to their operations than what they were using previously
  • Pre-configured API integrations are boosting efficiency
  • Richer data tools are enhancing operational and customer intelligence
  • Ready-to-use computer architectures are a solid foundation for future growth. 

We believe industry cloud for banking will be a bigger part of banks’ go-to-cloud roadmap given its potential benefits for institutions of all sizes.

PwC's industry cloud for banking solution leverages the firm’s decades of sector experience and delivers, we believe, a banking-specific, flexible and agile platform that can serve the needs of a diverse set of clients. We believe a common cloud services platform can help clients get to market faster and more efficiently, with less risk and greater reliability and at a potentially lower cost compared to other approaches to the cloud. (See PwC’s industry cloud for banking offerings and alliances)

Transformation is in full swing

In conversations with clients, we sense increasing optimism about their ability to vigorously compete in a fully digital world; optimism that’s based on their use of cloud technology to address the pandemic’s challenges.

While it’s not clear what banking will look like in the years ahead, what we perceive is that the industry is regaining the competitive initiative by embracing the cloud and its related breakthroughs: scalable computing, big data analytics, complex modeling, disaster recovery, remote working and AI.

As more banking and capital markets companies make the operational, business model and technological changes to compliment a cloud transformation, the more likely it is that they’ll become cloud-powered companies, able to effectively compete in a vibrant marketplace.

Transformation is in full swing
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