Cloud computing is going to play a significant role in job creation for the banking industry and beyond, according to recent research conducted by IDC. The research, which was funded by Microsoft and released this month, predicts that cloud-enabled IT innovations may generate nearly 14 million jobs and $1.1 trillion in revenue across industries around the world. About 1.4 million of those jobs could be in the banking industry alone, according to IDC.
Such growth could occur because cloud computing drives efficiencies in IT maintenance by taking the burden of application maintenance off of IT staff, according to IDC and Microsoft. The resources resulting from these efficiencies are often applied to mission-critical IT projects plus innovation and job creation in other areas such as sales, finance, production and marketing, say the companies.
Joe Pagano, managing director of banking and capital markets for Microsoft's financial services group, says that currently, the banking industry spends more on IT than other industries --'14 percent of its total costs compared to a 7-percent cross-industry average. "We see the cloud as being the key tool in the modern era of IT for the banking industry to drive that 14 percent number down closer to cross-industry standard," he asserts.
Pagano notes that much of banks' IT spending is connected with the upkeep of on-premises legacy systems and applications, and as banks migrate applications to public and private clouds, those IT maintenance costs begin to drop. "Then, as banks begin to drive new efficiency with cloud technology they're able to reappropriate capital to higher growth areas, which allows them to expand their business," he explains.
For more on the IDC research related to cloud computing and job creation visit Microsoft's website.
[For more on the migration of banking systems to the cloud, read "Temenos and Microsoft Make Cloud-Based Core Systems a Reality."]