A Look Through the Keyhole on Cloud Adoption within Capital Markets

When it comes to discussing cloud adoption by capital markets, the conversation has been whether or not public cloud is ready for financial services. Results from the latest TABB Group outreach indicate the real question is whether capital markets is ready for the cloud.

Capital markets have operated a certain way for a long time: self-contained infrastructure with applications and services running on premises with significant proprietary aspects. But that way is now unsustainable as the cost model of financial services is broken. Due to regulatory changes, banks are no longer able to leverage their balance sheets in a dynamic manner, unable to revenue-grow their way back to pre-crash ROEs. Banks must instead reduce outdated and overly expensive infrastructure, processes, and application support. Add to this the massive cost of regulatory compliance, and you see an industry under duress. The industry knows that it must achieve a fundamental transformation in how its operations are run and how innovation is achieved. This transformation will require a step change in thinking and an openness that may not have been present before. The answer, at least partially, lies in cloud adoption-- but for once, capital markets is behind the technology curve.

Today’s public cloud meets the security requirements of financial services organizations; it is now up to those organizations to work through the logistics of integrating it into their infrastructure. Overcoming these challenges may be nontrivial, but the business benefits justify the effort; especially as firms progress from using cloud for utility computing to the game changing innovation offered by machine learning and artificial intelligence (AI). Globalization means asset classes are deeply coupled and correlated with every other asset class, so the intrinsic structure of how markets operate has evolved. Leading capital markets organizations are adopting cloud, whether private, hybrid, public or multi-cloud, in ways that allow them to reduce costs but also leverage machine learning/AI and so keep pace with this evolution.

TABB engaged a group of senior executives from influential and insightful capital markets firms to discuss cloud adoption at their firms. The resulting in-depth discussions provide an exclusive “look through the keyhole” on current and future cloud adoption within capital markets.