Breaking the Cloud Taboo – The Middle East Banks take their Initial Steps

Cloud has been the top technology focus for banks and financial institutions across the globe . The reluctance to adopt this technology could largely be attributed to security concerns, regulatory compliance, losing physical control over the servers, etc. However, as the technology continues to evolve, banks in the Middle East are re-evaluating where cloud fits into their architectures.

Leading banks like Emirates NBD and Abu Dhabi Commercial Bank are running cloud projects The banking sector is transforming as more banks and financial institutions seek to reap key cloud benefits including- low upfront costs, increased efficiencies, faster time to market, scalability and flexibility.

As one of the largest banks in the region, Emirates NBD has always used technology to enable its business strategy. It started its cloud transformation by selecting a cloud-based incentive compensation solution. To ensure security, the bank visited the data centre and also engaged a third party to carry out penetration testing on the solution. After the success of its first cloud implementation, ENBD now plans to expand the deployment to five more departments.

Paul Butres, Senior Product Manager of Application Management and Development Group, ENBD, quotes,  “We have taken the decision to move with bigger products - another five to six big products; we wouldn’t have taken that if we were not confident with the first one.” He further continues, “I am happy to see, not as a bank but as a user of cloud,  that some other banks in this region have already signed on other products. They got the confidence that Emirates NBD has gone to cloud.”

UAE banks and financial institutions are not the only ones to venture into cloud technologies in Middle East region.

Kuwait International Bank became the first Islamic bank that implemented a private cloud in Kuwait. The bank turned to Microsoft for the private cloud infrastructure. Commenting on the project, Lamya Altabtebai, Deputy General Manager - Corporate Support at KIB, said, " Private Cloud will reduce costs and speed the delivery of IT services. With the new technology our employees will be able to serve our clients and the business more efficiently and effectively in a confidential and secure approach.”

Qatar is also exploring the advantages cloud technology brings. Qatar First Investment Bank is in partnership with Microsoft Gulf to develop a private cloud infrastructure in order to upgrade its core IT infrastructure. In Saudi Arabia, Riyad Bank has selected cloud-based digital signage software. The bank was extremely sensitive to security concerns that come along with using cloud-based solutions. However, over the time, it has gained confidence after thoroughly analysing and using the cloud-based solution. BroadSign Vice President said, “In the past, banks have tended to avoid cloud-based software offerings due to strict regulations regarding network security, but the tide is starting to turn.”

While these are preliminary steps towards cloud adoption in the Middle East,  they are demonstrating how cloud can transform the financial services landscape across the region.

According to recent reports by Gartner, 44 percent of chief information officers (CIO) of the financial services industry in the Middle East and Africa region (MENA) expected more than half of their transactions to be supported through cloud infrastructure by 2015.

The initial steps have been taken towards cloud, and now it is a matter of time before the Middle East banks are at par with the world in leveraging cloud technologies to the best possible extent.