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Tuesday 19 March 2019


Investment banks warm to public cloud

Written by Peter Walker

Investment banks are set to increase their use of public cloud by over 50 per cent within the next five years, as greater awareness of hosting banking specific applications with cloud vendors’ drives industry-wide confidence.

A global study of over 32 tier one and two investment banks by IT consultancy GFT found that three quarters are more attracted by cloud computing’s ability to introduce agility into their businesses than its ability to simply deliver cost reductions (50 per cent).

This may reflect the introduction of new measures that require large but fluctuating levels of data processing power - regulatory reporting for MIFID II, FRTB, etc - and the development of client applications that can have a transformative effect on the existing business, according to GFT.

Investment banks are most keen to introduce cloud in their development (67 per cent), front office (55 per cent) and risk (43 per cent) departments. The majority of new and planned use cases for cloud involve utilising high performance computing (63 per cent) and big data (52 per cent) capabilities.

However, concerns regarding cloud adoption remain, mainly in relation to regulation - with 90 per cent of respondents citing this as their main concern - followed by data protection (72 per cent) and security (70 per cent).

The biggest regulatory sticking point is the lack of clarity on how cloud will be governed in the capital markets sphere. Increased regulation covering data protection and security concerns still prevail, although banks generally acknowledge the security focus of the main cloud vendors, read the report.

Andrew Rossiter, head of technology services at GFT, acknowledged that the shift to public cloud in investment banking has been slow to start, but banks are now willing to embrace the transformation and reap the benefits of becoming cloud native.

“Some regulatory and security issues around cloud still remain, but banks have taken great strides to overcome these and are advancing their technology estate transformation plans at a rapid pace – the ‘war for talent’ to achieve this has only just begun!”

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