KUALA LUMPUR, Malaysia — Malaysia’s financial services institution (FSI) sector is slow in adopting cloud technologies and are wary of embracing digital transformation compared with its regional peers, according to the findings of a three-month study, undertaken by Singapore-based Forrester Singapore Pte Ltd, and commissioned by Microsoft Operations Pte Ltd.

Jarom Britton, Microsoft Corporate Attorney (Malaysia and South East Asia New Markets) said despite a strong interest in technology, the pace of cloud adoption in Malaysia has been slowed by common misconceptions that there were regulatory barriers to the use of public cloud services.

Malaysia’s FSIs have been adopting the ‘wait-and-see’ attitude towards the technology, he told a press conference in conjunction with the launch of the study titled, Ensuring Agility and Trust in A Rapidly Changing Business Environment here today.

The study involved in-depth interviews with 34 senior information technologies (IT) decision-makers in the Asia Pacific financial services sector from Australia, Hong Kong, Korea, Malaysia, New Zealand, Japan, Indonesia, Singapore and the Philippines.

It aimed to evaluate cloud adoption trends among FSIs in the Asia Pacific and gauge these firms’ knowledge and perceptions of cloud-related financial regulations.

On security concerns, Britton said a Cloud Trust Study conducted by New York-based Time Warner Cable Research showed that 60 per cent of the companies were concerned about data security; 45 per cent worried that using the cloud would result in a lack of control over their data while 42 per cent doubted the cloud’s reliability.

In fact, 94 per cent gained security benefits they did not have with on-premise technology security, 62 per cent have seen increased levels of privacy protection and 75 per cent experienced improved service availability, he said.

On cost reduction and efficiency of cloud adoption, Britton, cited a research conducted by Singapore-based DBS Bank as saying that the technologies would enable a financial institution to improve 60 per cent of the speed to deliver its services and to reduce 78 per cent of its cost.

In today’s digital ecosystem, organisations that do not evolve fast enough would be less competitive as they would face disruptions in their respective industry from new entrants and overseas providers and many instances by non-traditional banking services, he said.

Speaking of cloud adoption, Forrester Research Analyst Frederic Giron noted that Malaysia and Indonesia were more conservative than their peers in Singapore, and more likely to be guided by a limited or incorrect understanding of regulations.

In other words, FSI in these markets are more likely to be reactive to regulations or guidelines (often not fully understood or properly interpreted) versus proactively seeking to understand and, or push the boundaries to influence those guidelines, he said.

He said Singapore and Hong Kong firms generally centred cloud approaches on improving IT responsiveness to internal business demands for cost reductions and improved agility.