Can cloud technology help banking transition to net zero?

Data from IDC shows that transitioning away from legacy systems within banking could prevent 1 billion tons of carbon dioxide in the coming years. A growing consensus from experts is that the green future of the industry lies within cloud computing.

Our financial worries and existential dread about the climate are intrinsically linked, apparently. Oh, good.

It may not be something we consider often, but the energy required to facilitate bank transfers and money management is hugely significant. That’s right, it’s not just the financing of fossil fuels that we need to be concerned with.

The majority of banks operate their own data centres, meaning many tens of thousands of computers, storage devices, cooling systems, and servers. On average, each major institution will require more than 100 megawatts to function at normal capacity, which is enough to power around 80,000 US households at once.

While this sum is concerning, the fin-tech industry largely acknowledges that it must go net zero with its practices in the coming years if we’re to meet decarbonisation targets – excluding cryptocurrency, which is an energy-guzzling beast entirely of its own.

At COP27 in November, this message was carried by big UK players including Santander and HSBC, whose executives discussed the natural progression of banking en route to net zero. Armed with data from market intelligence firm IDC, they stated that cloud computing is the most promising solution.