A New Era of Cloud Diversification in the BFSI Sector

Cloud strategy in the BFSI sector is evolving quickly. Organizations are no longer relying on a single cloud model; they’re diversifying to boost flexibility, security and performance.

These insights come from our BFSI Flash Report: Trends, Challenges, and Strategic Imperatives in the Financial Services Industry, based on input from 245 IT decision-makers across banking, financial services, and insurance. The data reveals how organizations are currently using cloud platforms — and how their strategies are shifting:

• Private cloud is preferred by 25% of organizations for its reliability and adaptability in highly regulated environments.
• Public cloud is used by 18%, with another 23% planning to expand adoption within the next two years.
• Hybrid and multicloud solutions are each in use by 17% of respondents, combining public and private capabilities to improve operational efficiency.

Based on conversations with global financial institutions, nearly half plan to expand or modify their cloud infrastructure. Many aim to take advantage of hybrid cloud to optimize workloads and improve overall efficiency. This approach involves building a robust, flexible architecture that spans public, private and edge environments — enabling organizations to align performance, latency and data security with internal standards and requirements.

Read the full BFSI Flash Report: Trends, Challenges, and Strategic Imperatives in the Financial Services Industry.

The strategic imperative of hybrid cloud

Hybrid cloud is not just a component of IT strategy — it's a cornerstone. With 84% of IT leaders reporting high satisfaction with its efficiency and performance, and 50% considering it critical for multi-environment deployments, hybrid cloud stands as a linchpin in the future of BFSI operations.

These findings align with what we’re hearing from regulators, including the U.S. Department of the Treasury. In its Financial Services Sector’s Adoption of Cloud Services report, the department noted that “the most common strategy that firms pursued was a hybrid approach, where public cloud deployment continued to be mixed with on-premises or private cloud offerings.”

This strategy builds resiliency by implementing a security-aware architecture that strengthens privacy, security, and both data sovereignty and residency — while supporting disaster recovery and other cyber resilience protocols.

Technological advancements accelerate cloud adoption

Emerging technologies are accelerating the BFSI sector’s cloud capabilities. Notably, 51% of organizations are exploring cloud-enabled 5G services, while 49% are integrating cloud-native AI and machine learning to enhance data analytics, operational efficiency and fraud detection. The integration of AI into hybrid cloud strategies is transformative as interoperability and seamless integration across on-premises and cloud-based platforms increases, with a staggering 90% of BFSI organizations incorporating AI to drive innovation and insights.

Overcoming adoption challenges

Despite promising advancements, the BFSI sector still faces hurdles in cloud adoption. Cost management, security concerns, and integration with legacy systems remain key challenges. In addition, 45% of organizations report resource gaps — particularly in managing security and risk within cloud environments. Addressing these issues is essential to fully realize the value of cloud technologies.

Transformative impact on BFSI operations

Cloud technologies are redefining the core operations of BFSI organizations. Approximately 37% of applications in BFSI are now hosted on cloud platforms, supporting critical functions such as:

• Risk management: using real-time data to mitigate threats and ensure compliance
• Compliance reporting: automating processes to adhere to evolving standards
• Real-time financial analytics: providing data-driven insights for strategic decision-making

The Future is hybrid cloud

The insights from our 2025 State of Cloud Report reveal a decisive shift toward more diverse and sophisticated cloud strategies. BFSI leaders are not just expanding their cloud footprint; they are strategically adopting and integrating technologies to enhance operational resilience and compliance, and drive innovation.

Your next steps in the cloud journey

As the BFSI sector stands at a critical inflection point, the need for informed, strategic decision-making has never been more urgent. Whether you are refining your cloud strategy, focusing on cost efficiency and security, or integrating advanced AI-driven capabilities, the journey toward cloud maturity requires a deep understanding of both opportunities and obstacles.

We invite you to download and explore the full 2025 State of Cloud Report for a deeper dive into the trends and strategies shaping the future of cloud in the BFSI sector. For expert guidance on accelerating your cloud transformation, contact us today. Seize this opportunity to redefine the landscape of financial services with cutting-edge cloud solutions that ensure success in the digital era.

Download the report: 2025 State of Cloud Report.