ABSTRACT: To enhance the capacity for data management and to offer various services, Cloud computing technology is a best source. This technology is providing various services to the customers on demand through internet. Several benefits are provided by this Cloud technology to banks such as reducing costs, improved capacity of data processing and superior excellence in banking services. Financial institutions would use the services of cloud technology with more flexibility and efficiency as and when they require. But several organizations are hesitating to introduce this technology due to security challenges. This paper is studying about the challenges of cloud technology in offering various enhanced services to banks as well as to customers with alternative solution to contain the issues. Moreover, it is discussed about various challenges in offering these financial services to banking institutions. Hence the data is gathered through secondary sources such as newspapers, magazines and various journals. The study is descriptive in nature.