Posted: 23 Mar. 2023 7 min. read

An industry cloud imperative for banking and capital markets

A blog post by Nicholas Merizzi, principal, Deloitte Consulting LLP; Pinaki Dhal, senior manager, Deloitte Consulting LLP;  Val Srinivas, research leader, Deloitte Services LP; Samia Hazuria, manager, Deloitte Consulting LLP. 

While cloud adoption has continued to gain momentum, many companies need vertical solutions that involve cloud but go beyond to provide sector-specific capabilities. Industry clouds can fit that need, especially for the banking and capital markets (B&CM) industry, where they can help banks enhance their digital and business transformation journey and get an edge in a very competitive market.

A recent Deloitte survey indicates that the vast majority (95%) of B&CM executives see cloud as the cornerstone of their digital transformation1—which can also be seen in the growth of their cloud spending that is predicted to be almost 2.8 times higher than their overall IT budgets for the next four years.2 And, for most banks, cloud isn’t monolithic; it’s viewed as a combination of other technologies including AI and IoT that serve as “force multipliers” to their digital strategies.3

However, problematically, these beliefs have yet to translate to tangible business value for many banks. Indeed, many banks still deploy emerging technologies in silos, so they might perceive lower value from their cloud investments. The emergence of industry clouds can help solve the problem.

Industry clouds: the new transformation accelerators

Digital transformation is evolving quickly, and banks’ efficiency in navigating cloud-based infrastructure to digitally transform also has improved considerably in the past decade. Further, there is new verticalization of cloud-based products and services that provides numerous B&CM business-specific capabilities. These products and services also abstract the inner workings of the tech stack to improve and simplify the experience.

The industry cloud imperative

Industry clouds are modular, composable, cloud-based products and services designed to deliver value to specific business sectors. They help banks solve particular business problems such as finding efficiency gains, increasing transparency, and extrapolating insights. Industry clouds also help speed banks’ digital transformation efforts and reduce associated risks by merging the advantages of current cloud services with industry-specific processes. Industry clouds are typically built on five architectural principles that set them apart: 

  • Business-orientation: They are focused on mitigating B&CM problems including business growth, customer experience, operational efficiency, and risk and regulatory compliance.
  • Sector-wide applicability: They have broad applicability across B&CM segments such as retail, wealth management, commercial banking, capital markets, and payments.
  • Cloud-based integration: They typically encompass one or more advanced services enabled by cloud (AI, 5G, quantum, AR/VR, etc.)
  • Modularity: They make it possible to integrate capabilities without significant programming. This reduces their deployment time from years to months by making them simpler to deploy.
  • Customization: They accommodate flexibility based on the unique demands of banks while still remaining, at their core, modular and composable.

Banks that don’t accelerate their digital transformation risk being outpaced by their competition. Industry clouds hold great potential to help banks accelerate transformation by unifying disparate technologies, curtailing banks’ legwork, strengthening innovation, and enabling them to focus on their unique value proposition. In short, industry clouds empower business and technology executives with robust and wide-ranging innovation capabilities that give them a competitive edge.

Potential benefits sought by B&CM institutions from industry clouds

Industry clouds are instrumental in catalyzing the transformation and automation of business processes unique to particular business sectors. They have compelling benefits:

  • Faster time to market: The execution and integration processes can be made simpler by the extensible nature of industry clouds, thereby accelerating the time to market and enabling quick deployment of new features and functions.
  • Focus on true differentiation: By mitigating the need to re-create common applications or processes, industry clouds can free up resources, including talent, to help banks innovate and concentrate on competitive differentiation.
  • Ecosystem curation: Industry cloud providers take an integrated approach, which enables access to an ecosystem of fintechs, independent software vendors, and SaaS providers. This approach often relieves major pain points for banks, including vendor due diligence and contracting.
  • Continuous innovation: Banks can adopt features provided by others, even their competitors, because industry clouds are constantly improved based on feedback from users across the sector.
  • Industry-specific data: Analytics and insights can be powered by predefined B&CM-specific data models and workflows.

Despite the many benefits there are concerns that have emerged—primarily, data security and regulatory risks and vendor lock-in. That said, industry clouds support interoperability, which can help with both security and vendor lock-in issues.

Navigating an evolving and diverse cloud network

Core players such as hyperscalers, enterprise providers, and core B&CM providers are rapidly and continuously developing new products. Providers are also taking a varied approach to industry cloud strategies, capabilities, and co-development models.

For hyperscalers, industry cloud is a strategic shift. Their approach is to bundle existing products and features with an industry-specific focus. Many are also shifting their approach from being product- to customer-centric to help their customers solve specific use cases such as cost and profitability analysis, digital medical lockbox, digital assistant, and more. Hyperscalers and other key industry players are also using emerging technologies and working with sector-specific software vendors and systems integrators to develop industry-specific customizations that better meet the needs of their customers.

Moving forward with industry clouds

Selecting an industry cloud solution isn’t often straightforward. The myriad solutions to choose from can be confusing. However, since industry clouds are meant to fast-track transformation, it’s useful to employ a model when choosing a solution. The ARDA (Assess, Reimagine, Decide, Act) model can guide banks in choosing and deploying industry cloud solutions.

First, and perhaps most crucially, B&CM institutions should assess and identify specific business challenges at the line-of-business level. Next, they should analyze their portfolio of emerging technologies and reimagine the operating models with industry cloud capabilities. The next step is to decide on the deployment approach—that is, whether to procure an off-shelf solution or build one on their own.Lastly, they should act on the chosen industry cloud, with the starting point being a minimum viable product that can evolve with feedback.

Robust governance and review processes are also critical. These should include constant communication with solution providers as to their plans, forthcoming innovations, and the industry cloud ecosystems they plan to support in the future. 

Visit “Accelerating digital transformation in banking and capital markets with industry clouds” for more information. 




1 Deloitte, Deloitte US Future of Cloud Survey Report, accessed December 6, 2022.View in Article

2 Jerry Silva and Karen Augustine, Banking on the Cloud: Results from the 2022 CloudPath Survey, IDC, September 2022.View in Article

3 Deloitte, Deloitte US Future of Cloud Survey Report, accessed December 6, 2022.View in Article


Interested in exploring more on cloud?

Get in touch

Nicholas Merizzi

Nicholas Merizzi

Principal | Cloud Strategy

Nicholas is a principal in Deloitte’s Cloud Strategy offering where he supports global clients across multiple industries. Nicholas leverages more than 20 years of experience to enable global organizations achieve their cloud and digital goals at enterprise scale. Whether it be mapping a path for transformation, modernizing complex IT systems, or exploring emerging technologies that enable business strategies, Nicholas has proven success helping companies navigate their specific digital transformation needs. It’s his goal to bring strategy, depth in infrastructure, and data center acumen to clients by being at the forefront of the cloud and digital tech transformation landscape. Today, Nicholas leads Deloitte’s global Industry Cloud offering, which is a portfolio of industry-specific business capabilities activated by cloud enabled services.

Pinaki Dhal

Pinaki Dhal

US Banking Industry Cloud Solutions Leader | Deloitte Consulting LLP

Pinaki is a leader in Deloitte's Banking Consulting in the US. He is responsible for driving Product innovation and Operational efficiency for Wholesale Banking products - Commercial Deposits, Lending, Syndications, and Trade & Supply Chain finance. He also leads Banking Industry solutions development leveraging emerging technologies such as Digital Assets, Artificial Intelligence, IoT, and Quantum Computing. For the last 15 years, he has advised global Banking institutions on their Core Banking Operating Models and Platform transformations.

Val Srinivas

Val Srinivas

Senior research leader, banking & capital markets

Val Srinivas is the banking and capital markets research leader at the Deloitte Center for Financial Services. He leads the development of our thought leadership initiatives in the industry, coordinating our various research efforts and helping to differentiate Deloitte in the marketplace. He has more than 20 years of experience in research and marketing strategy.