Capital Markets: Heads in the Cloud

The capital markets industry is, finally, embracing cloud technology and momentum is building fast.  Last year when TABB Group conducted outreach on this topic, we found just a handful of capital markets firms using public and/or private cloud, but this year the numbers, and the mood, are markedly different.

As we predicted, the industry has turned the corner on cloud.  Results of TABB Group’s recent survey of buy-side and sell-side technology executives (114 respondents) found that around half were using private cloud technology. Public cloud use was also substantial at 32 percent of bank and sell side and 25 percent of buy side respondents.   Although public cloud is still used by a minority of firms, the rapid increase in use over the past year or so, combined with a majority using private cloud technologies, has resulted in a sentiment of “inevitability” among our outreach participants when it came to the capital markets’ embrace of public cloud.

Our outreach interviews found that today’s capital markets’ technology professional, whether working for technology operations or a line of business, is now grappling with advancing beyond virtualization and Infrastructure as a Service (IaaS) models to service oriented architectures, multicloud and enterprise deployment issues.

We also found that business executives have a growing awareness of the potential for competitive advantage through artificial intelligence (AI) and machine learning (ML),  resulting in growing pressure on IT departments to support public cloud.  Although hybrid cloud architectures are still common, Tabb Group found a strong interest from firms to architect for fully public, multicloud strategies.

We also reviewed the capital markets and enterprise offerings of leading cloud service providers.  Based on this research coupled with our outreach, the report covers how individual vendors are viewed by this industry and how their respective enterprise offering compares.

This report contains results of a TabbFORUM survey on cloud adoption within capital markets, as well as targeted outreach interviews with technology executives at buy/sell-side firms, banks, and cloud service providers.    It includes the following exhibits:

• Percentage use of hosted data center and cloud, by bank/sell side, buy side
• Primary motivations for using cloud, by buy side, bank/sell side
• Percent of financial institutions moving workloads to hosted and cloud solutions
• Examples of financial entities embracing cloud
• Comparison of key enterprise cloud services from AWS, Azure and GCP