A recent survey has revealed widespread dissatisfaction among UK banking innovation leaders regarding the authenticity of cloud technology claims in core banking systems.
The research, conducted by SaaScada, shows that a significant majority of senior banking executives are frustrated by what they term ‘cloudwashing’ — a practice where legacy systems are marketed as cloud-native despite offering limited genuine cloud capabilities.
The survey found that cloud migration is nearly universal across the UK banking sector, with 95% of institutions either having already moved or planning to move core banking workloads to the cloud. Leaders cited scalability, enhanced control over product development, and cost efficiencies as the primary motivations behind these initiatives. However, despite the enthusiasm for cloud adoption, many have encountered challenges, discovering that not all solutions deliver the true benefits associated with cloud-native systems.
The prevalence of cloudwashing is striking, with 39% of the 150 UK banking leaders admitting to having purchased systems labelled as ‘cloud’ that ultimately lacked authentic cloud features. An additional 23% expressed difficulty in determining whether the solutions under consideration were genuinely cloud-native. Consequently, only 38% of respondents expressed satisfaction that their core banking systems truly matched the cloud capabilities marketed by vendors.
“Adopting a ‘cloud’ core banking system that isn’t truly cloud-native won’t automatically resolve existing challenges. Cloudwashing often clouds the real picture, so it’s crucial for banking leaders to do thorough research. A genuine cloud-native system should be born in the cloud, offer real-time data access, and provide architectural flexibility to foster innovation,” said Nelson Wootton, CEO and Co-Founder of SaaScada.
While the motivations for cloud adoption are clear — primarily scalability and operational reliability — many banks are not experiencing the anticipated benefits because their systems lack true cloud architecture. This disconnect could have serious implications for competition and innovation, especially as traditional banks struggle to respond as swiftly as newer entrants.
SaaScada outlined five key characteristics that banks should look for in evaluating cloud-native core banking platforms. These include low initial setup costs, flexibility in product design and deployment, no mandatory downtime for upgrades, access to real-time customer data, and unlimited scalability. Industry experts emphasise that both technical and procurement teams must scrutinise vendor claims carefully and understand the underlying architecture to ensure that their digital transformation goals are genuinely being met.
The survey was conducted in March 2025, gathering insights from 150 senior leaders across UK retail and business banks, including Heads of Digital Transformation, CTOs, and Chief Innovation Officers. These institutions ranged in size from £0.5 billion to £100 billion in balance sheets, reflecting a broad spectrum of the industry’s approach to cloud migration and digital transformation.
