Listed financial software specialist Rubik is predicting increased demand from smaller banks and credit unions for cloud-based computing services as they migrate off legacy banking platforms.While the four big banks are undertaking technology transformations costing billions of dollars, this luxury is not available to smaller institutions. They do, however, still need to update or upgrade legacy computer systems in order to be able to offer real-time banking and to develop a more comprehensive understanding of individual customers, as well as to meet customer demand for internet and mobile banking. Rubik believes a Software as a Service (SaaS), or cloud style, alternative, where banks pay per account per month to use a modern banking platform, will prove increasingly attractive to smaller institutions. Four years into a 12-year exclusive licence to sell a SaaS version of the Temenos banking application, Rubik has sold three such versions of the system, according to Ken Carr, Rubik's managing director. Rubik has also sold three "on-premises" versions of the Temenos platform, where banks run the software on their own computers.Maleny Credit Union was the first user of what Carr refers to as the "bank-in-a-box" cloud computer version of Temenos. Instead of paying "several million dollars" for an on-premise licence for Temenos, the cloud-based version is charged per month per account, "so it becomes a straightforward operating expense", Carr added."There are no capital costs up front - we call it the bank-in-a-box and it's getting a lot of traction."Cloud computing is increasingly popular across all sectors thanks to its inherent elasticity, and the ability for users to pay only for what they use. Last week, BSA, an international anti-piracy software alliance, nominated Australia as second only to Japan in terms of the nation's preparedness to support cloud computing initiatives through the mix of government policy and existing or planned technical infrastructure.According to Carr, a key driver in the financial sector is that: "The smaller banks can't have an army of IT people in the IT department - so to buy this as a service is more efficient." It could also be more secure, as Rubik runs the Temenos SaaS at Macquarie Telecom's tier four-rated (essentially highly secure and robust) data centre in Sydney. "We have to comply with the APRA rules. When you are running someone's main business for them you have to take it seriously," said Carr.Establishing their own tier-four data centre would be too costly for smaller banks.Asked whether there could possibly be any competitive edge for banks that are all, essentially, using the same banking platform, running out of the same data centre, Carr said that the Temenos SaaS system was highly configurable, to the extent that "the three clients that are on it each look totally different." Rubik also has its own mobile and internet banking modules that can plug into the Temenos SaaS system."There's a lot more momentum building up at the moment. We are slowing things ourselves because we needed to build up our skills set to meet demand," said Carr.