Private and Public Cloud Market in Financial Services to Grow by USD 106.43 Billion from 2024-2028, Driven by Unlimited Storage and Big Data Demand, AI’s Impact on Trends- Technavio

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Technavio 

Feb 05, 2025, 04:59 ET

NEW YORK, Feb. 5, 2025 /PRNewswire/ — Report on how AI is redefining market landscape – The global private and public cloud market in the financial services industry size is estimated to grow by USD 106.43 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of  19%  during the forecast period. Growing demand for virtually unlimited storage and big data is driving market growth, with a trend towards development of openstack. However, data security and privacy issues in the private and public cloud in financial services  poses a challenge. Key market players include Akamai Technologies Inc., Alibaba Group Holding Ltd., Alphabet Inc., Amazon.com Inc., Cisco Systems Inc., Citrix Systems Inc., Dell Technologies Inc., Equinix Inc., Hewlett Packard Enterprise Co., International Business Machines Corp., Juniper Networks Inc., Microsoft Corp., NetApp Inc., Oracle Corp., Rackspace Technology Inc., Salesforce Inc., SAP SE, SS and C Technologies Holdings Inc., Temenos AG, and VMware Inc..

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Market Driver

Financial service institutions are increasingly adopting cloud solutions to enhance their IT strategies and meet the evolving needs of their customers. Private cloud solutions offer control and customization, while public cloud solutions ensure operational efficiency and scalability. Hybrid cloud adoption is on the rise, combining the benefits of both worlds. Artificial intelligence and machine learning are transforming financial services with edge computing and cloud-native technologies. Digital transformation strategies require advanced security measures, including strong encryption, identity management, and compliance automation. Internet penetration and the growing use of mobile phones, tablets, and digital banking have accelerated cloud adoption. However, regulatory problems and cyber attacks pose challenges, requiring cloud expertise and robust data protection measures. Cloud computing services provide application development tools, virtual computers, and storage, enabling financial institutions to deliver innovative solutions and improve customer acquisition. Disaster recovery and business continuity plans are essential in this digital age. 

OpenStack is an open-source cloud technology initiated by Rackspace and NASA in 2010. It provides a collection of software tools for managing and constructing cloud platforms. Backed by companies like Cisco Systems, Rackspace, Dell, HPE, IBM, Oracle, Red Hat, and VMware, OpenStack is a promising solution for the future of cloud computing. In the financial services industry, large enterprises are leading the adoption of OpenStack for their core banking platforms. Notable implementations include solutions for handling large-scale transactions, data processing, and security. The technology’s open-source nature and strong industry support make it an attractive choice for financial institutions seeking flexible, scalable, and cost-effective cloud solutions. 

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Market Challenges

• Financial service institutions in the industry are increasingly adopting cloud solutions to enhance operational efficiency and support digital transformation. Private cloud solutions offer control and customization, while public cloud solutions provide scalability and agility. However, challenges exist. Security is a major concern, with the need for advanced security measures, identity management, compliance automation, and strong encryption. Hybrid cloud adoption is a popular IT strategy, combining the benefits of both private and public clouds. Artificial intelligence and machine learning are driving innovation, with edge computing enabling real-time processing. Digital transformation strategies require cloud-native technologies, containerization, and microservices architecture. Internet penetration and remote working have accelerated cloud adoption, but regulatory problems and cyber attacks pose significant challenges. Cloud expertise is crucial for successful implementation, with delivery models including Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS). Cloud computing services offer application development tools, storage, and analytical support. Banks must balance the benefits of cloud computing with data protection measures and disaster recovery plans. Customer acquisition and service customization are key drivers, with cloud computing software enabling digital banking transformation for internet users on mobile phones and tablets.
• The financial services industry handles large volumes of sensitive client and customer data, including bank accounts, debit and credit card information, and business transactions. Due to the valuable nature of this data, financial institutions are prime targets for cybercriminals. Strict data security standards are essential in this industry to mitigate risks and protect confidential information. With increasing data privacy regulations and potential damage to reputation from data breaches, there is growing demand for robust data privacy policies. Private and public cloud solutions offer secure storage and processing options for financial services, ensuring compliance with regulations and enhancing data security.

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Segment Overview 

This private and public cloud market in the financial services industry report extensively covers market segmentation by  

• Service Type
  • SaaS
  • IaaS
  • PaaS
• Deployment
  • Public Cloud
  • Private Cloud
• Geography
  • North America
  • Europe
  • APAC
  • South America
  • Middle East And Africa
• Solution
  • Financial Forecasting
  • Financial Reporting & Analysis
  • Security
  • Governance, Risk & Compliance
  • Others
• Application
  • Revenue Management
  • Wealth Management
  • Account Management
  • Customer Relationship Management
  • Asset Management
  • Others

1.1 SaaS-  SaaS solutions, delivered over the Internet through a subscription model, are increasingly adopted by financial services firms for CRM, wealth management, core banking, accounting, and payroll. These solutions offer advantages such as reduced upfront costs, shorter implementation times, and access to advanced analytical tools. Vendors like Salesforce.com specialize in SaaS-based CRM and wealth management software, generating significant revenue. The demand for predictive analysis drives the adoption of SaaS solutions. SaaS is a cloud service model providing automated delivery, cost-effective deployment, and eliminating hardware and software management complexities. Public SaaS offers elasticity, scalability, and simplified access to platform solutions like AI, big data, and IoT. Kwipped’s recent launch of “APPROVE,” a SaaS solution for equipment financing, underscores the growing trend. The wide adoption of SaaS technology will continue driving the demand for SaaS solutions, contributing to the growth of the private and public cloud market in the financial services industry.

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Research Analysis

In the Financial Services Industry, the adoption of cloud computing solutions, including Private and Public clouds, is transforming the way institutions manage their computing resources. Private cloud solutions offer enhanced control and security, making them a popular choice for handling sensitive financial data. In contrast, Public cloud solutions provide scalability and cost savings, making them suitable for non-sensitive applications and workloads. Both Private and Public cloud solutions offer tools for service customization, enabling Financial Service Institutions to tailor their infrastructure to specific needs. Hybrid cloud adoption is also gaining traction, allowing institutions to leverage the benefits of both Private and Public clouds. Advanced technologies like Artificial Intelligence (AI) and Machine Learning (ML) are being integrated into cloud computing services to enhance operational efficiency and improve customer experience. Edge computing is another emerging trend, bringing computing power closer to the source of data generation, reducing latency and improving performance. Cloud computing services also offer application development tools, storage solutions, and Digital Transformation strategies to help Financial Services Institutions stay competitive in an increasingly digital world. The widespread Internet penetration makes cloud solutions accessible to institutions of all sizes, making them an essential part of the Financial Services Industry’s technological landscape.

Market Research Overview

In the Financial Services Industry, Private and Public Cloud solutions have become essential for organizations seeking to enhance their IT infrastructure and support digital transformation. Private cloud solutions offer computing resources, control, and customization, making them ideal for handling sensitive financial data. On the other hand, Public cloud solutions provide scalability, agility, and cost savings through shared computing resources and tools. Both solutions offer advanced security measures, including strong encryption, identity management, and compliance automation, addressing regulatory problems and cyber attacks. Hybrid cloud adoption enables financial service institutions to leverage the benefits of both private and public clouds, ensuring operational efficiency and data security. Artificial intelligence, machine learning, edge computing, and cloud native technologies are driving innovation in the financial services sector, enabling advanced analytics, digital banking transformation, and improved customer acquisition. However, challenges such as internet penetration, remote working, and IT strategies require a deep understanding of cloud computing services, application development tools, and storage solutions. Cloud computing software, data storage, and analytical support are essential for financial institutions to remain competitive, with digital transformation strategies becoming increasingly important. Despite these benefits, challenges such as regulatory issues, disaster recovery, and cybersecurity threats require expertise and robust cloud solutions to mitigate risks and ensure data protection. Cloud computing solutions are transforming the financial services industry, enabling institutions to adapt to the increasing use of mobile phones, tablets, and internet users for banking services. The future of cloud computing in financial services will depend on the ability to address these challenges and leverage the benefits of cloud computing, including operational efficiency, agility, and advanced security measures.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Service Type
  • SaaS
  • IaaS
  • PaaS
• Deployment
  • Public Cloud
  • Private Cloud
• Geography
  • North America
  • Europe
  • APAC
  • South America
  • Middle East And Africa
• Solution
  • Financial Forecasting
  • Financial Reporting & Analysis
  • Security
  • Governance, Risk & Compliance
  • Others
• Application
  • Revenue Management
  • Wealth Management
  • Account Management
  • Customer Relationship Management
  • Asset Management
  • Others

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio’s report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio’s comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

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SOURCE Technavio