AFME calls for capital market cloud adoption
Written by Peter Walker
The Association for Financial Markets in Europe (AFME) has called for the capital markets industry to realise the full potential of public cloud.
In a new paper, the industry body set out 14 recommendations to increase the transparency and collaboration required to build confidence, trust and capability in public cloud.
Public cloud is expected to expand significantly across all areas of the capital markets value chain, with AFME members identifying benefits including greater business agility and innovation, improved cost management and efficiency, and enhanced client experience and service offerings.
However, the paper outlined several barriers to this adoption at present, including legacy IT complexity, security implications, regulatory concerns, a lack of standardisation in cloud provider services, and long-term considerations on concentration risk, among others.
Given these barriers, the paper found that banks are still at an early stage of public cloud adoption – over two thirds of AFME members involved in discussions estimated that only one to 10 per cent of their bank’s current workload was using some level of public cloud today.
James Kemp, managing director and head of technology and operations at AFME, said: “The use of public cloud in financial services offers significant opportunities and benefits for all parties – however, to realise these and increase adoption it is vital that the whole industry, including banks, cloud providers and regulators, continue to collaborate.”
Among the 14 recommendations, four key themes emerged:
• Banks should design their public cloud strategy with a clear and realistic target operating model, review and reprioritise accordingly, and ensure executive sponsorship throughout adoption.
• Cloud providers must continue to engage with banks and regulators to support building the capabilities and assurances required - legal, regulatory, privacy - and support increased standardisation that can also satisfy regulatory requirements.
• Regulators can support greater regional and global harmonisation, in respect to requirements for both public cloud adoption and supervisory practices, that will reduce the complexity for banks adoption.
• The industry as whole must continue to share knowledge, best practice, and promote standardisation and consistency, in how public cloud is adopted.