Cloud has taken a really long time to go mainstream, but it’s finally getting there, said Emily Steele, President of North America for banking software provider Temenos.

Steele told Bank Innovation that the Swiss firm saw about 400% cloud deployment growth amongst its clients from 2015 to 2017, with the most significant growth occurring in Latin America, Australia, and now Europe and North America. She said there are already three challenger banks and a fintech that will be going live in the cloud with Temenos this year, although she declined to name the companies.

“Every bank asks about cloud, but what we’ve seen in North America has been a slow adoption to that,” Steele said. “The barriers to winning that business are really still the security and compliance areas.”

Other hurdles involve timing and the bank’s own comfort and risk tolerance.

“The bank has to be ready for that move,” Steele said. “From a technology perspective, we don’t push cloud. It’s just another deployment option.”

She said Temenos is building solutions like Infinity, its omni-channel digital banking product, and T24 Transact, its cloud-native, realtime core banking system, to be both cloud-native and cloud agnostic.

Also see: Temenos Lands PayPal Contract for Core Banking

“As clients are ready to adopt, or migrate or move to a cloud strategy, we’re prepared regardless of the product and can support them in understanding that compliance element and the risk element,” she said.

Steele said the bottom line is that cloud is the future, as banks will have less time and fewer resources to do banking if they also have to focus on infrastructure, architecture and security.

“Financial institutions need the ability to be nimble, and they need elasticity,” Steele said.

For instance, transaction volume can vary dramatically on any given day.

“Today, not being in the cloud, you have to pay for the highest volume or the worst case scenario, all the time,” she said. “In moving to cloud, you have the ability, elasticity or scalability to grow, and it affords you that without you having to pay the price.”

Todd Matters, Co-Founder and Chief Architect of RackWare, a hybrid cloud management platform that helps enterprises migrate to the cloud and protect their workloads, also said the movement to cloud is no longer a matter of “if” but “when.”

He said companies that are looking to take advantage of cloud typically pick two or three clouds.

“They’re not going to pick five or six, but they’re also not going to pick just one,” Matters told Bank Innovation. “Then they’re going to use all of those clouds that they end up picking. Also, increasingly, we see them deploying some kind of a private cloud.”

The goal, he said, is to have flexibility and not be dependent on any one cloud provider. Having a private cloud also gives banks the ability to store their most secure applications in-house while using public clouds to take care of the low-hanging fruit.

“Nobody wants to be locked in,” Matters said. “So, having a strategy around ensuring that you’re not locked into a cloud, and that you can move or have mobility across clouds, is an issue.”

He said cost reduction and enabling faster response times to customers’ needs are really driving more companies into cloud.

“A lot of it has to do with the trade-offs between continuing to make investments in real estate, for the data centers, whether they’re leasing it or renting it or whether they’re managing the physical aspects,” Matters said.

There’s “no doubt,” he said, that it’s easier and quicker to provision or decommission resources in a cloud environment. He said migrations can be data center to data center, but most of them end up being either data center into cloud or, increasingly, cloud to cloud.

“The predominant use case in the financial vertical, though, is disaster recovery,” Matter said. “That’s mostly data center into cloud.”

He said if done correctly, cloud can be an economical model for disaster recovery while providing higher levels of responsiveness and recovery.

While Steele said cloud can reduce infrastructure costs by 10 times, Matters said getting a return on investment can still be tricky.

“While cloud has the opportunity to reduce your IT costs, you have to manage those resources differently than you would your own business,” Matters said. “If you manage cloud resources the way you do on physical servers, you end up spending more money.”