nCino, Inc. (NCNO): PESTLE Analysis [Nov-2025 Updated]

You're trying to figure out if nCino's growth story holds up against the 2025 headwinds, and honestly, they sit on a knife-edge: regulatory compliance is getting tougher, but the global market for financial services IT is still projected to climb by a strong 7.8% this year. We need to cut through the noise and see exactly how political risks-like increased US cloud vendor scrutiny and data sovereignty laws-and technological shifts, particularly the rapid integration of generative AI, map onto their revenue pipeline. This PESTLE breakdown gives you the clear, actionable insights you need to map their near-term risks and opportunities.

nCino, Inc. (NCNO) - PESTLE Analysis: Political factors

Increased US regulatory focus on cloud vendor risk management for banks.

The political environment in the United States is placing a much tighter regulatory focus on how banks use third-party cloud vendors like nCino. This isn't a new rule, but a significant enforcement and maturity push on existing guidance. The Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) finalized interagency guidance on Third-Party Relationships in June 2023, and it remains a top compliance priority for banks in 2025.

For nCino, this means your financial institution clients face intense scrutiny on their vendor oversight processes, which forces us to provide more documentation, more audit transparency, and more robust exit strategies. It's a cost of doing business, but it also creates a competitive moat-smaller, less mature vendors can't meet this bar. We're seeing a clear regulatory demand for stronger third-party risk management frameworks from our partners.

Here's the quick math: if a bank's vendor oversight fails, the bank is still liable. Regulators expect your due diligence to be scaled to the vendor's criticality. That's a big lift for both sides.

Geopolitical tensions slow international expansion and increase compliance costs.

Geopolitical fragmentation is a clear headwind for nCino's global growth strategy, especially in Europe and Asia-Pacific. While the company continues to expand-like the October 2025 announcement of a new partnership in Spain-the rising tensions between major economies, protectionist policies, and trade barriers directly increase operational complexity.

This risk is quantifiable in the financial statements. In Fiscal Year 2025, nCino's non-GAAP net income was impacted by approximately $(10.5) million due to non-operating, predominantly non-cash foreign currency fluctuations on intercompany loans. This is the cost of currency volatility and complex cross-border financial structures, a direct result of operating in a fragmented geopolitical landscape.

The main compliance cost drivers are:

• Navigating sanctions and export controls in high-tech sectors.
• Increased investment in local data centers to meet residency rules.
• Higher legal and audit expenses for cross-jurisdictional contracts.

Honestly, scaling globally requires a defintely higher compliance budget today than it did five years ago.

Government emphasis on financial inclusion drives demand for efficient digital lending.

The push by governments for greater financial inclusion and economic equity is a significant tailwind for nCino's core digital lending platform. In the US, the Treasury Department's October 2024 National Financial Inclusion Strategy calls for financial institutions to integrate consumer-permissioned alternative data into credit scoring, which opens safer credit opportunities for those with limited credit history.

This is precisely where nCino's platform shines: enabling banks to use AI and alternative data to make faster, more efficient, and inclusive lending decisions. In key emerging markets, the government focus is even sharper. For instance, the anticipated Union Budget 2025 in India is expected to bolster financial inclusion and digital infrastructure, supporting the country's enterprise fintech ecosystem which is projected to reach $20 billion by the decade's end.

This political drive creates a direct market opportunity for platforms that can automate and streamline the lending process, making it cheaper for banks to serve previously underserved populations.

Data sovereignty laws (e.g., in Europe and Asia) complicate global data storage architecture.

Data sovereignty-the idea that data is subject to the laws of the country where it is collected, processed, and stored-is fundamentally reshaping cloud architecture. This is a massive political factor, particularly in Europe. The EU's Digital Operational Resilience Act (DORA), which mandates strict vendor risk provisions for financial entities and their ICT vendors, became effective on January 17, 2025.

DORA requires banks to conduct vendor risk assessments and build exit strategies, and it applies to nCino as a critical Information and Communication Technology (ICT) provider. Plus, the ongoing conflict between the US CLOUD Act and the EU's GDPR means that data stored in Europe by a US-headquartered company may still be subject to US legal requests, which undermines European digital sovereignty goals.

This forces nCino to invest heavily in localized cloud infrastructure to meet data residency requirements in countries like India, Brazil, and China, where data localization mandates are on the rise.

The political pressure to ensure data control is creating a complex, multi-region architecture challenge for any global cloud provider.

Political Factor	FY2025 Quantifiable Impact/Action	Strategic Implication for nCino
US Cloud Vendor Risk Focus (OCC/FDIC/Fed)	Mandates adherence to 2023 Interagency Guidance; requires enhanced audit and due diligence for all US clients.	Opportunity: Higher barrier to entry for smaller competitors; nCino's maturity becomes a key selling point.
EU Digital Operational Resilience Act (DORA)	Effective January 17, 2025, mandating vendor risk assessments and critical ICT service audits for EU clients.	Risk/Cost: Requires significant investment in compliance mapping and contract alignment across the EU.
Geopolitical/FX Volatility	$(10.5) million non-cash foreign currency fluctuation impact on FY2025 non-GAAP net income.	Risk: Increased operational cost and reduced predictability of international revenue streams.
Financial Inclusion Mandates (US/Global)	US Treasury's October 2024 National Strategy; India's enterprise fintech market projected to reach $20 billion.	Opportunity: Direct government-driven demand for efficient digital lending and credit inclusion solutions.

nCino, Inc. (NCNO) - PESTLE Analysis: Economic factors

High-interest rate environment reduces bank lending volumes, especially mortgages.

The persistent high-interest rate environment in 2025 acts as a headwind for the core lending activities of nCino's primary customer base, the financial institutions. You see this most clearly in the mortgage market, where rates holding near decade-plus highs have significantly dampened volume. For instance, economists projected that the average 30-year fixed-rate mortgage would remain elevated, only falling about 0.54 percentage point from its year-end 2024 level, making refinancing and new purchases difficult for consumers.

This slowdown extends to commercial and small business lending. The average Small Business Administration (SBA) loan amount saw a steep 38% decline from May 2021 to May 2025, directly restricting the volume of transactions that flow through nCino's platform. The projected deceleration of US GDP growth to just 1.5% in 2025 further limits overall loan demand and bank revenue growth, squeezing net interest margins.

Banks prioritize cost-saving IT projects, favoring nCino's efficiency tools over large-scale core replacements.

Facing pressure on net interest margins and loan volume, banks are shifting their technology budgets to focus on efficiency and mandatory compliance, which is a clear opportunity for nCino. Global banks are expected to spend $176 billion on IT in 2025. However, only about 39% of this is expected to be allocated to 'change-the-business' initiatives like new product development, reversing a prior trend. The focus is now on 'run-the-business' projects.

This economic reality favors nCino's cloud-based Bank Operating System because it offers a clear, fast Return on Investment (ROI) by streamlining existing operations-like account opening and loan origination-rather than requiring a multi-year, multi-million-dollar core banking system replacement. One clear driver is the looming Dodd-Frank 1071 compliance deadline in October 2025, which mandates new data collection and reporting for small business loans, creating immediate demand for nCino's regulatory-ready solutions.

• Focus shifts to operational resilience and regulatory compliance.
• Efficiency tools offer faster ROI than major infrastructure upgrades.
• Retail and consumer implementations are booming to enhance customer experience.

Inflationary pressure increases the cost of talent and SaaS infrastructure for nCino.

While nCino's fiscal year 2025 total revenues reached a strong $540.7 million, up 13% year-over-year, the inflationary environment still impacts the cost side of their ledger. As a Software-as-a-Service (SaaS) provider, nCino's main costs are talent and cloud infrastructure. The market for skilled professionals, particularly those with expertise in nCino's expanding products like Consumer Lending and SBA, is highly competitive, pushing up wages.

Here's the quick math: to maintain its growth trajectory, nCino must compete aggressively for talent, which puts upward pressure on its Research and Development (R&D) and Sales and Marketing (S&M) expenses. Plus, the ongoing reliance on third-party cloud infrastructure means that any price increases from major cloud providers are passed directly onto nCino, impacting the cost of revenue and the overall GAAP loss from operations, which was $(18.1) million in fiscal year 2025.

Global spending on financial services IT is projected to grow by 7.9% in 2025, still a strong tailwind.

Despite the cautious spending environment, the overall digital transformation of the financial sector provides a powerful underlying tailwind. Worldwide IT spending is expected to total $5.43 trillion in 2025, an increase of 7.9% from 2024. This growth is largely fueled by the resilient demand for Artificial Intelligence (AI) and cloud computing, both of which are central to nCino's platform strategy.

The financial services industry is continuing its migration to the cloud, and nCino, with its subscription revenues of $469.2 million in fiscal year 2025, is defintely positioned to capture a significant share of this growth. The shift towards AI-led innovation in banking, where institutions are seeking to enhance advisory propositions and accelerate software development, directly aligns with nCino's product roadmap, ensuring sustained demand for its solutions.

nCino, Inc. (NCNO) Key Financial Metric (FY 2025)	Amount (USD)	Economic Context
Total Revenues	$540.7 million	13% growth year-over-year, demonstrating resilience despite economic headwinds.
Subscription Revenues	$469.2 million	Represents 86.8% of total revenue, reflecting stable, recurring SaaS business model favored during economic uncertainty.
Non-GAAP Operating Income	$96.2 million	A 56% increase from FY 2024, showing strong operational efficiency gains despite inflationary cost pressures.
Annual Contract Value (ACV)	$516.4 million	Indicates continued customer commitment to the platform, with a 13% reported year-over-year increase.

nCino, Inc. (NCNO) - PESTLE Analysis: Social factors

Strong consumer demand for instant, digital-first lending experiences accelerates platform adoption.

You know the drill: customers expect the same speed from their bank as they get from Amazon. This massive social shift toward instant, digital-first experiences is a core tailwind for nCino, Inc. (NCNO). The global digital lending market is projected to reach a value of $507.27 billion in 2025, showing just how much consumer behavior has changed. In the U.S. alone, digital lending now accounts for roughly 63% of all personal loan originations. That's a huge chunk of the market demanding a better process.

This demand is why financial institutions are scrambling for cloud-based solutions. nCino's platform directly addresses this need, with reported customer results showing a 54% faster loan origination process and a 62% acceleration in small business loan decisions. Honestly, if a bank isn't delivering speed, they're losing customers to a competitor who uses this kind of technology. This isn't a nice-to-have; it's a defintely a must-have.

Digital Lending Market Metric (2025)	Value / Percentage	Implication for nCino
Global Digital Lending Market Value	$507.27 billion	Indicates a massive addressable market for the platform.
U.S. Personal Loans Originated Digitally	Approximately 63%	Shows the majority of new loan volume requires a digital solution.
AI-driven Loan Approval Time Reduction	Up to 65% faster	Validates nCino's AI/ML investment for speed and efficiency.
nCino Customer Loan Origination Speed-up	54% faster	Concrete, competitive advantage in a speed-driven market.

Talent shortage in core banking IT pushes more financial institutions toward outsourced cloud solutions like nCino.

The banking sector has a persistent and growing IT talent gap, especially for core legacy systems. Finding and retaining skilled personnel to maintain and modernize outdated infrastructure is becoming prohibitively expensive and difficult. This labor market pressure is a major, though indirect, driver for cloud adoption.

When enterprise and super-regional banks expand their nCino implementations-moving from commercial to consumer, mortgage, or small business lending-they often face a 'talent vacuum.' They lack the headcount to support post-implementation upgrades and maintenance. So, instead of hiring dozens of expensive, specialized in-house IT staff, they shift the burden to a vendor like nCino, whose cloud-based platform is managed and updated externally. This is a clear case where a social challenge (talent scarcity) turns into a strategic opportunity for a Software-as-a-Service (SaaS) provider.

Generational shift (Millennials, Gen Z) increases pressure on banks to modernize user interfaces.

The generational shift is forcing banks to upgrade their user experience (UX) from clunky, decades-old systems to modern, mobile-first interfaces. Millennials and Gen Z are the new financial powerhouses, and they are defintely not loyal to a bad app. They make up a combined 73% of digital lending platform users, and 79% of millennials cite mobile apps as their primary access point for banking services.

The data is stark: half of digital banking users are willing to switch financial providers for a better digital experience, and 31% already have made the jump. Banks know they must meet the standard set by fintechs, which means digital onboarding needs to be seamless and take less than five minutes. nCino's platform helps banks meet this bar, with customer reports showing consumer account opening reduced from half an hour to just minutes, which significantly minimizes customer abandonment rates. That's how you win the next generation of customers.

Banks face public scrutiny on fair lending practices, requiring transparent, auditable systems.

Public trust in banks is fragile, and the scrutiny from consumer groups and regulators on fair lending practices is intense. Fair Lending compliance requires banks to demonstrate that loan decisions are consistent, non-discriminatory, and fully auditable. This is where a unified, cloud-based platform becomes a critical risk-mitigation tool.

nCino's platform has built-in features, like its Portfolio Analytics solution, specifically designed to help ensure compliance with regulations like the Current Expected Credit Loss (CECL) standard and Fair Lending rules. The ability to use AI-driven underwriting, which was leveraged in 44.19% of the digital lending market in 2024, helps ensure consistency in decision-making, boosting approval rates by 25% without increasing portfolio risk. This consistency is the heart of defensible fair lending. Plus, the platform's detailed analysis history and certificate tracking make it easy for a bank to manage and audit every loan decision in one place, which is a massive help during a regulatory review. Finance: Review nCino's compliance documentation by end of quarter.

nCino, Inc. (NCNO) - PESTLE Analysis: Technological factors

Rapid integration of generative AI is crucial for automated loan decisioning and risk scoring.

The race to embed Generative AI (Gen AI) into core banking processes is the single biggest technological driver for nCino right now. You simply cannot compete today without moving beyond basic automation to intelligent, predictive tools. The company's answer is the 'Banking Advisor' suite, powered by its nIQ technology, which is designed to automate complex, high-value tasks like credit memo drafting and underwriting analysis.

This focus is already delivering concrete business value for customers in fiscal year 2025 (FY2025). For instance, early adopters saw document processing time in commercial banking cut by a massive 74%. For small business lending, the platform accelerated loan decisions by 62%, which is a huge competitive advantage for a bank. To keep this momentum, nCino invested 23.9% of its total FY2025 revenue of $540.7 million back into Research & Development (R&D). That's a defintely high commitment for a FinTech company.

The newest features, like 'AUS Smart Tasks' and 'Refi Opportunity Analyzer,' launched in late 2025, show a clear path to automating the most complex parts of mortgage and credit analysis. The goal is simple: let the AI do the heavy lifting so the loan officer can focus on the customer relationship. This is how you drive efficiency and increase non-GAAP operating income, which hit $96.2 million in FY2025.

AI-Driven Efficiency Metric (FY2025)	Impact	Business Line
Document Processing Time Reduction	74% Faster	Commercial Banking
Loan Decision Acceleration	62% Faster	Small Business Banking
Application Abandonment Rate Drop	41% Reduction	Small Business Banking
Mortgage Documentation Completion Time Cut	47% Faster	Mortgage Lending

Competition intensifies from core banking providers (e.g., FIS, Fiserv) and specialized FinTechs.

The competitive landscape is a constant headwind, but also an opportunity. nCino is not just competing with other cloud-native platforms; it's directly challenging the entrenched core banking providers like FIS and Fiserv. These legacy players still hold the largest overall market share, but they are often constrained by older technology stacks (monoliths) that are slow to integrate new features like Gen AI.

nCino's core business model is built on replacing these legacy point products with a single, unified platform. The challenge is that FIS and Fiserv are aggressively modernizing their offerings, and specialized FinTechs, like those focused solely on a niche like automated onboarding, are also pushing the envelope. The key is execution: nCino must prove its platform can deliver superior total cost of ownership and faster time-to-market for new banking products than a bank could achieve by stitching together solutions from multiple vendors.

Continuous need to enhance platform security and resilience against sophisticated cyber threats.

In the financial sector, a platform is only as good as its security. With the average cost of a data breach in the financial industry remaining one of the highest across all sectors-often exceeding $5.9 million per incident in 2025-nCino's continuous investment in platform resilience is not a luxury; it's a prerequisite for selling to global financial institutions. Any perceived weakness can halt a multi-million-dollar deal instantly.

The company addresses this risk through a comprehensive Enterprise Risk Management Program, overseen by the Audit Committee of the Board. This includes constant cybersecurity risk and threat assessments, plus vulnerability management programs. While the exact dollar amount of security-specific R&D is internal, it is a significant portion of the total 23.9% R&D spend in FY2025. What this estimate hides is the non-quantifiable cost of maintaining customer trust, which is priceless.

Adoption of open Application Programming Interfaces (APIs) drives platform interoperability and partner ecosystem growth.

The future of FinTech is open architecture, and nCino is betting big on open Application Programming Interfaces (APIs) to drive platform stickiness. You need to be the hub, not a spoke. The launch of the 'nCino Integration Gateway' in September 2025 is the concrete action here, transforming how the platform connects with a bank's existing technology stack (core banking systems, data warehouses, etc.).

This Integration Gateway is purpose-built to eliminate integration bottlenecks, which are a major cause of project delays and cost overruns. It already supports compatible integrations for over 14 core banking platforms and more than 50 financial services solutions. This open approach directly supports a strong partner ecosystem, which is essential for global scalability. Here's the quick math on their ecosystem strength:

• Over 3,500 consultants from major System Integrators (SIs) like Accenture, Deloitte, and PwC are trained on the nCino Bank Operating System.
• These partners increase nCino's capacity to onboard new customers and expand its global reach.
• The interoperability simplifies compliance with new regulations, such as the Dodd-Frank 1071 rule, which requires banks to collect and report small business loan application data.

The ability to integrate seamlessly is what makes a cloud platform truly enterprise-ready.

nCino, Inc. (NCNO) - PESTLE Analysis: Legal factors

Stricter enforcement of data privacy laws (e.g., state-level US laws, GDPR) requires continuous platform updates.

The regulatory landscape for data privacy is no longer a slow burn; it's a full-on fire drill, especially for a platform like nCino that handles sensitive financial data globally. You are dealing with a fragmented, expensive compliance environment. For instance, the cumulative fines issued under the General Data Protection Regulation (GDPR) in the EU exceeded €6.2 billion by the second quarter of 2025, showing regulators are defintely serious about enforcement.

In the US, the lack of a single federal law means nCino must continuously update its platform to comply with a patchwork of state-level regulations. As of late 2025, 21 US states have their own privacy laws in effect, including the California Privacy Rights Act (CPRA). This complexity is costly: initial compliance for a FinTech to cover key US states is estimated to range from $600,000 to $1.25 million. The core action is embedding privacy-by-design into every product release, not patching it later.

New guidelines on operational resilience from regulators (OCC, Fed) mandate robust disaster recovery and uptime guarantees.

Operational resilience-the ability to withstand and recover from disruptions-has moved from a best practice to a clear regulatory mandate. The Office of the Comptroller of the Currency (OCC) and the Federal Reserve (Fed) are now focused on the systemic risk posed by third-party cloud providers, which is exactly where nCino sits. The OCC's 2025 Bank Supervision Operating Plan explicitly prioritizes operational risk, emphasizing preventative controls, incident response, and data recovery/backup.

Federal banking agencies are working to create 'baseline operational resilience requirements' for large banks' critical operations, with a direct focus on third-party service providers. This means nCino's client contracts must now guarantee specific Recovery Time Objectives (RTOs) and Recovery Point Objectives (RPOs) that meet these new, stricter standards. The European Union's Digital Operational Resilience Act (DORA), which became applicable on January 17, 2025, also sets a global benchmark for this kind of rigorous, cross-border resilience.

Compliance with anti-money laundering (AML) and Know Your Customer (KYC) regulations is a core platform requirement.

Compliance is a revenue driver for nCino because its platform automates the very processes that banks are fined for getting wrong. The cost of non-compliance is staggering: US regulators imposed over $5 billion USD in AML-related fines in 2024 alone. Globally, financial crime compliance costs have reached approximately $206.1 billion annually.

The platform must continuously adapt to new rules, such as the expanded beneficial ownership database access provided by the Financial Crimes Enforcement Network (FinCEN) under the Corporate Transparency Act (CTA). This table shows the scale of the compliance challenge nCino's platform must solve for its clients:

Compliance Metric	2024/2025 US Data Point	Platform Implication
US AML Fines (2024)	Over $5 billion USD	Requires real-time transaction monitoring and automated Suspicious Activity Report (SAR) filing.
Global Compliance Cost	$206.1 billion annually	Drives demand for RegTech (Regulatory Technology) solutions to reduce operational overhead.
Key US Regulation	Corporate Transparency Act (CTA)	Mandates integration with FinCEN's beneficial ownership database for automated Customer Due Diligence (CDD).

Patent litigation risk exists in the highly competitive and innovative FinTech space.

The highly innovative nature of FinTech, particularly with the integration of Artificial Intelligence (AI) into loan origination and risk modeling, makes patent litigation a persistent and growing risk. A recent survey showed that 46% of companies reported greater vulnerability to patent disputes over the past 12 months, which is a clear trend for 2025. This is a defensive cost you must factor in.

The main drivers of this risk for a software company like nCino are:

• AI-Related Claims: 55% of respondents expecting increased Intellectual Property (IP) exposure in 2025 cite the growing use of AI technology as a contributing factor.
• Patent Assertion Entities (PAEs): These non-practicing entities actively acquire patents solely to enforce them against operating companies, driving up litigation activity.
• Defensive Portfolio: The best defense is a strong offense, meaning nCino must continue to invest a portion of its Research and Development budget-which was 23.9% of its $540.7 million total revenue in fiscal 2025-into securing its own patents to deter competitors.

Your legal team needs to be building a patent arsenal for defensive leverage, not just for offensive claims.

nCino, Inc. (NCNO) - PESTLE Analysis: Environmental factors

You're looking at the Environmental (E) in ESG (Environmental, Social, and Governance), and it's a massive tailwind for nCino, but with a few critical technical risks. The core takeaway is that nCino's cloud-native platform is a direct solution for banks facing intense pressure to reduce their carbon footprint and report on green lending, creating a significant sales advantage.

Here's the quick math: If nCino can capture just an extra 0.5% of the projected 7.8% growth in financial services IT spending, that's a significant revenue bump, but they defintely need to keep their regulatory compliance ahead of the curve. Your next step is to assess their current AI integration roadmap against the competition.

Growing Investor and Regulatory Pressure on Banks to Report on ESG Metrics

Investor and public scrutiny on financial institutions' environmental impact has intensified dramatically in 2025. Investors are no longer satisfied with high-level sustainability narratives; they demand structured, transparent, and financially relevant disclosures, treating ESG data as integral to risk management.

While federal regulatory momentum in the US has slowed-the SEC paused the legal defense of its climate-related disclosures rule, for instance-state-level and global pressures are accelerating. For example, California's Climate Accountability Package (SB 253 and SB 261) requires large US companies doing business in the state with over $1 billion in annual gross revenues to publicly disclose greenhouse gas emissions, including Scope 3 (value chain emissions) starting in 2027. This means banks must now embed ESG maturity into credit assessments, which directly influences a borrower's loan pricing and access to capital.

Despite the mixed US regulatory signal, a September 2025 PwC survey showed that over half of companies reported continued growing pressure for sustainability reporting from stakeholders, including investors and customers. This market demand is a crucial driver for nCino's platform adoption.

nCino Acts as a Key Enabler, Helping Banks Track and Report on Green Lending and Climate Risk Data

nCino's ESG Solution directly addresses this market need, positioning the company as a key enabler for banks navigating the complex reporting landscape. The solution is fully cloud-based and embeds ESG data capture and assessment directly into the credit lifecycle, helping banks avoid fragmented ESG management.

This functionality allows financial institutions to:

• Capture ESG data at the customer, loan, and collateral level.
• Customize ESG scoring methodologies and assessments.
• Monitor ESG performance across the entire portfolio.
• Report to meet diverse disclosure requirements.

The platform's ability to provide a clear sustainability picture across the loan portfolio is a significant competitive edge, especially as banks face pressure to quantify their financed emissions and climate-related financial risks. nCino's FY2025 total revenues were $540.7 million, a 13% increase year-over-year, demonstrating strong market traction for its core offerings, which the ESG solution enhances.

Cloud-Native Architecture Offers Lower Carbon Footprint Than Legacy On-Premise Systems, a Selling Point for Banks with Net-Zero Goals

The fundamental architecture of the nCino platform-a single, multi-tenant software-as-a-service (SaaS) solution-is inherently environmentally friendly compared to legacy on-premise systems. The cloud-based platform inherently supports paperless, electronic-only processes, digitalizing documents and workflows throughout the lending lifecycle, which significantly reduces the environmental impact of traditional banking.

The environmental advantage is quantifiable, which is a powerful selling point for banks with net-zero commitments:

• Migrating to Infrastructure-as-a-Service (IaaS) can reduce carbon emissions by up to 84%.
• It can also reduce energy consumption by up to 64% compared to traditional on-premise operations.

This is driven by the superior energy efficiency of hyperscale data centers, which typically operate with a Power Usage Effectiveness (PUE) between 1.1-1.4, versus the 1.5-2.0 PUE common in traditional enterprise data centers. For a bank, choosing nCino is a direct way to lower their Scope 3 (purchased goods and services) and Scope 2 (purchased electricity) emissions.

Increased Scrutiny on the Energy Consumption of Data Centers, Influencing Cloud Provider Selection

The environmental benefit of cloud computing is not absolute; it hinges on the practices of the underlying cloud provider. Increased scrutiny on the energy consumption of data centers is influencing cloud provider selection, which is an indirect risk and opportunity for nCino.

nCino, as a cloud-native platform, relies on its host for its environmental performance. Major providers are responding aggressively: Amazon Web Services (AWS), a key player in the cloud market, has committed to a 100% renewable energy usage target by 2025. This commitment allows nCino to pass on the benefit of lower carbon intensity to its customers.

The table below illustrates the clear environmental choice facing nCino's banking clients:

Metric	Traditional On-Premise Data Center	Hyperscale Cloud Data Center (nCino Host)
Typical Power Usage Effectiveness (PUE)	1.5 - 2.0	1.1 - 1.4
Carbon Emission Reduction Potential	0% (Baseline)	Up to 84% reduction via IaaS migration
Energy Consumption Reduction Potential	0% (Baseline)	Up to 64% reduction
Renewable Energy Commitment	Varies by bank; often low	Major providers (e.g., AWS) targeting 100% by 2025

This means nCino must defintely prioritize partners with a favorable emission factor to maintain its green selling point. The platform's subscription revenues for FY2025 were $469.2 million, a 15% year-over-year increase, showing that the market is already rewarding their SaaS model, but the environmental component is a growth lever they must actively manage.

Finance: Analyze the impact of a 100-basis-point interest rate drop on commercial lending volume and nCino's pipeline by end of the quarter.