U.S. banks have been hesitant to use public cloud services due to security and regulatory concerns, but shrinking profits and pressure to cut information technology spending could soon force them to change their thinking.

The technology consulting firm Gartner has forecasted that, by 2016, poor return on equity will drive more than 60% of banks worldwide to process the majority of their transactions in the cloud. Economic pressure could also force banks to use lower-cost cloud computing services to manage a range of functions, from human resources to customer relationship management to disaster recovery, observers say.

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