Capital markets warming up to cloud

Latest research from Celent reveals capital markets are becoming more accepting of cloud-based technology due to market pressures, rising costs and technology developments.
By Paul Walsh
Regulation, rising cost pressures, macroeconomic uncertainty and the rise of FinTech is driving acceptance of cloud-based technology in capital markets, according to latest research from Celent.

A paper entitled ‘The cloud comes of age in capital markets’ revealed that cloud-based services had reached a ‘tipping point’ and are set to be the main delivery model for key industry functions.

Findings reveal that cloud is offering firms a more agile infrastructure enabling participants to address changing regulatory requirements, the proliferation of trading applications as well as the need to rapidly connect to multiple liquidity sources.

Cloud is also seen a key in FinTech development given its ability to facilitate the implementation of new ideas and reduce the cost of failure.

The paper revealed an increased appetite for cloud-based services in the last 12 to 18 months and that market participants are showing more acceptance of its security, stability and reliability.

Doubts still remain over the widespread adoption of cloud, notably data storage locations, risk liability and organisational inertia.

“The barriers to cloud adoption are no longer based on a mistrust of the technology, but rather how to successfully deploy a solution that complies with regulations, and these concerns are common to all technology solutions, cloud-based or not,” said Brad Bailey, research director at Celent.

“In many cases the public cloud is now more secure than on premise systems and we are seeing institutions alter their attitude from ‘never’ to ‘how to’ embrace the cloud.”