SaaS-based systems are widely used by Chinese banks, including large joint-stock banks, city banks, and rural banks. Some cloud-enabled business models have also emerged.

In the report Cloud Computing Strategies in the Chinese Banking Industry: Opportunities for Innovation, Celent examines usage of cloud computing at Chinese banks, cloud vendors’ strategies, and cloud-enabled innovations.

There are many examples of cloud usage by Chinese banks. Digital China Financial has already established a data center in Xi’an to tap into the rural banking market. Shandong Provincial City Commercial Banks Alliance developed a single, multibank comprehensive business system for its member banks. Aliyun and Alipay are now making preparations to jointly export cloud computing services. China UnionPay Data also plans to develop more SaaS-based services, including fraud detection, risk management, hosting, and call centers.

“Most cloud computing services currently employ shared IT to reduce costs,” says Hua Zhang, Analyst with Celent’s Asian Financial Services Group and author of the report. “In the future, banks may also use shared business processes and hardware to reduce overall operating costs. For example, banks can share branches and back offices. When Bank A’s branch is busy, a client from Bank A can visit Bank B to perform business transactions.”

This report provides an overview of China’s cloud computing market, profiling examples of cloud computing in Chinese banks, and examining vendors’ strategies.