---
title: Investment Banks Give Cloud Serious Consideration
description: Banks are more excited by increasing agility than creating cost savings.
image: https://articles.marketsmedia.com/hubfs/Imported_Blog_Media/iStock-879138078-May-12-2022-09-30-22-47-AM.jpg
---

![websites-group](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/new-MMG-01.svg)

[![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-new-marketsmedia-logo.svg)](https://www.marketsmedia.com/)

[![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-menu-traders-redlogo.svg)](https://www.tradersmagazine.com/)

[![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-menu-bestexe-logo.svg)](https://www.bestexecution.net/)

[![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-menu-fidesk-logo.svg)](https://www.fixglobal.com/)

[![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-fixglobal-new-logo.svg)](https://www.fixglobal.com/)

- [*Facebook*](https://www.facebook.com/MarketsMedia/)
- [*Twitter*](https://twitter.com/marketsmedia)
- [*Linkedin*](https://www.linkedin.com/company/markets-media-llc)
- [Newsletter](https://articles.marketsmedia.com/sky-high-investment-banks-give-cloud-serious-consideration#popup-newsletter)

#### Want the latest news on securities markets -- FREE?

Sign up to receive exclusive articles on topics including:

- Equity market structure
- Profiles of buy-side investment firms
- The evolution of multi-asset-class trading
- Regulation and its implications for markets
- The search for liquidity in fixed income markets
- The convergence of fintech and capital markets

Select one or more newsletters you would like to receive:

menu

[![Markerts media](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/header%20logo.svg "Markerts media")](https://articles.marketsmedia.com/)

- [Technology](https://articles.marketsmedia.com/tag/technology-2)
- Technology
- Investment Banks Give Cloud Serious Consideration

Search

- [Home](https://articles.marketsmedia.com/)
- [Trending](https://articles.marketsmedia.com/tag/trending)
- [Featured](https://articles.marketsmedia.com/tag/daily-email-feature)
- [Sectors](https://articles.marketsmedia.com/tag/sectors)
- [From The Markets](https://articles.marketsmedia.com/tag/from-the-markets)
- [AWARDS](https://articles.marketsmedia.com/tag/events)
- [Newsletter](https://awards.marketsmedia.com/newsletter-sign-up)
- [Newsletter](https://articles.marketsmedia.com/sky-high-investment-banks-give-cloud-serious-consideration#popup-newsletter)

Hide search

Search

- NewsLetter

![](https://articles.marketsmedia.com/hubfs/Imported_Blog_Media/trading-up-occ-iex-select-board-members-citadel-lands-lieblich-573x379-Jul-07-2022-09-34-11-57-AM.jpg)

[ON THE MOVE: Citi Hires Artie Ambrose;...](https://articles.marketsmedia.com/on-the-move-citi-hires-artie-ambrose-natalie-a-brown-to-mesirow)

![](https://articles.marketsmedia.com/hubfs/Imported_Blog_Media/Depositphotos_445735906_L.jpg)

[Trading Adapts to ESG and Sustainable...](https://articles.marketsmedia.com/trading-adapts-to-esg-and-sustainable-investing)

![](https://articles.marketsmedia.com/hubfs/Imported_Blog_Media/iStock-917493152-Jul-07-2022-09-34-19-09-AM.jpg)

[Focus on FX Execution Connectivity](https://articles.marketsmedia.com/focus-on-fx-execution-connectivity)

![](https://articles.marketsmedia.com/hubfs/Imported_Blog_Media/Depositphotos_333839538_L.jpg)

[TRACE Turns 20](https://articles.marketsmedia.com/trace-turns-20)

 09.24.2018

 By Shanny Basar

 Technology

# Investment Banks Give Cloud Serious Consideration

 09.24.2018 By Shanny Basar

![Investment Banks Give Cloud Serious Consideration](https://articles.marketsmedia.com/hubfs/Imported_Blog_Media/iStock-879138078-May-12-2022-09-30-22-47-AM.jpg)

[Share](https://www.facebook.com/share.php?u=https://articles.marketsmedia.com/sky-high-investment-banks-give-cloud-serious-consideration)

[Tweet](https://twitter.com/intent/tweet?text=US+ETFs+Have+Record+Net+Inflows&url=https://articles.marketsmedia.com/sky-high-investment-banks-give-cloud-serious-consideration)

[Share](https://www.linkedin.com/cws/share?url=https://articles.marketsmedia.com/sky-high-investment-banks-give-cloud-serious-consideration)

**By Andrew Rossiter, Head of Technology Services, GFT, the global banking technology engineering firm:**

The benefits of cloud computing have been widely extolled and promoted across the full spectrum of industries. This buzzword is now starting to make its impact felt amongst investment banks, who are beginning to realise its full potential. Recent research by GFT has revealed that the majority of investment banks are more excited by the potential of this technology to increase agility, rather than its ability to create cost savings. This is an interesting anomaly to the standard ‘efficiency driver’ for technology change, particularly amongst financial services firms, and points to some interesting background trends that are shaping new motivations for this tech implementation.

![](https://articles.marketsmedia.com/hs-fs/hubfs/Imported_Blog_Media/andrew-rossiter-150x150-3.jpeg?width=150&height=150&name=andrew-rossiter-150x150-3.jpeg) Andrew Rossiter, GFT

All banks have strong cloud growth plans over the next five years, but tier 2 institutions are notably more aggressive in their ambitions than their tier 1 counterparts. This first group are less constrained by legacy technology and convoluted internal systems, and are already seeing some of their key third-party application being ported to the cloud by vendors, bringing them an additional level of familiarity in this area.

**A flexible framework**

Within the broader concept of agility, respondents highlighted the need for greater flexibility and capacity in their business operations, particularly in the context of AI and Machine Learning. Against this backdrop, respondents highlighted the advantage of the ‘elastic’ cloud to rapidly add computational power and scale when required then scale it back as necessary.

This need for flexibility is also driven by ongoing regulatory requirements and uncertainty. For example, the ramp up of new data protection and accountability measures such as GDPR, MIFID II and FRTB, means there is an immediate requirement to process greater volumes of complex data more effectively. Banks are also looking to future proof themselves against any further incoming regulatory measures, which have historically served as unwelcome ‘black holes’ when it comes to cost and resources.

**The road to the cloud**

Any bank considering a cloud migration must have an inventory of its applications and a future road map of these going forward. The research shows banks to be well prepared in this area. On a scale of one to ten, nearly all the banks we spoke to expressed high confidence (i.e > eight), that they have a good handle on their application inventory. Tier 1 banks in North America emerge as the most prepared over time, with nearly 90% reporting that they have a multi-year roadmap.

Generally, banks are using a ‘lift and shift’ approach for end-of-life applications that can be moved with minimum effort. Reengineering is typically used where the application is still being actively developed and improved and is considered of strategic importance to the business. As we would expect, cloud native development is reserved for entirely new applications and processes such as machine learning and artificial intelligence.

The risks and issues that continue to concern banks regarding cloud adoption still revolve around security, regulation, data protection and vendor risk. Our research showed that the regulatory concern was not tied to a specific regulation in the cloud area, but rather because banks are looking at how regulators will act in future, given their increasing use of cloud. They report that they are concerned with the regulators’ lack of clarity of thought in this area. However, regulators are now starting to work directly with cloud vendors – for example, the Financial Industry Regulatory Authority (FINRA) are now working with Amazon’s AWS. The EBA has also published a paper specifying when financial institutions must notify regulators in the cloud area.

The data protection concern is mainly linked to the new European GDPR regulation and a continuing number of public data leaks. Banks therefore want to know where their data is being physically stored. Although banks acknowledge that the cloud vendors now have better security than they do, it is clear that they still feel nervous in this area – if a big cloud data breach were to occur, this would have a detrimental impact on confidence.

**Is it time to go public?**

In its early phases, the move to public cloud in investment banking has been slow, but we are now seeing more firms that are eager to embrace the transformation and reap the benefits of becoming truly ‘cloud native’, with new and efficient applications built directly in the cloud. Our research findings reveal that investment banks are set to increase their use of public cloud by over fifty percent within the next five years.

Despite this aim, the vast majority of banks confess that they have insufficient knowledge of the technology in-house. Some of the areas in which banks feel they require most external assistance include: understanding the evolving skills needed to deliver cloud transformation, security and cloud environment design, public cloud adoption frameworks, understanding of the security and compliance requirements of cloud (by country), and how to migrate large vendor apps to the cloud.

Naturally, some regulatory and security issues regarding cloud still remain, but banks have taken great strides to overcome these and are now advancing their cloud plans at a rapid pace, which will ultimately enable the technology estate transformation they so desire.

[Share](https://www.facebook.com/share.php?u=https://articles.marketsmedia.com/sky-high-investment-banks-give-cloud-serious-consideration)

[Tweet](https://twitter.com/intent/tweet?text=US+ETFs+Have+Record+Net+Inflows&url=https://articles.marketsmedia.com/sky-high-investment-banks-give-cloud-serious-consideration)

[Share](https://www.linkedin.com/cws/share?url=https://articles.marketsmedia.com/sky-high-investment-banks-give-cloud-serious-consideration)

![email](https://articles.marketsmedia.com/hubfs/Markets%20Media/email.svg)

### NEWSLETTER SIGN UP

And receive exclusive articles on securities markets

<https://twitter.com/marketsmedia?ref_src=twsrc%5Etfw>

### Related articles

1. [![](https://articles.marketsmedia.com/hs-fs/hubfs/Imported_Blog_Media/trading-across-the-pond-Jul-07-2022-09-33-17-07-AM.png?width=376&height=250&name=trading-across-the-pond-Jul-07-2022-09-33-17-07-AM.png)](https://articles.marketsmedia.com/eu-achieves-electronic-trading-of-standardized-otc-derivatives)
   
    Regulation
   
   ## [EU Achieves Electronic Trading of Standard OTC Derivatives](https://articles.marketsmedia.com/eu-achieves-electronic-trading-of-standardized-otc-derivatives)
   
   
   
   ISDA warns on proposed changes to post-trade deferrals regime.
   
   
   
   07.07.2022 By Shanny Basar
2. [![](https://articles.marketsmedia.com/hs-fs/hubfs/Imported_Blog_Media/iStock-522304914-Jul-07-2022-09-33-41-28-AM.jpg?width=376&height=250&name=iStock-522304914-Jul-07-2022-09-33-41-28-AM.jpg)](https://articles.marketsmedia.com/six-digital-exchange-collaborates-with-fireblocks)
   
    Fintech
   
   ## [SIX Digital Exchange Collaborates with Fireblocks](https://articles.marketsmedia.com/six-digital-exchange-collaborates-with-fireblocks)
   
   
   
   The partnership will focus on delivering an institutional custody solution for digital assets.
   
   
   
   07.07.2022 By Shanny Basar
3. [![](https://articles.marketsmedia.com/hs-fs/hubfs/Imported_Blog_Media/Depositphotos_103566932_L-2.jpg?width=376&height=250&name=Depositphotos_103566932_L-2.jpg)](https://articles.marketsmedia.com/iosco-publishes-crypto-asset-roadmap)
   
    Regulators
   
   ## [IOSCO Publishes Crypto-Asset Roadmap](https://articles.marketsmedia.com/iosco-publishes-crypto-asset-roadmap)
   
   
   
   The IOSCO Fintech Task Force will collaborate closely with other international bodies.
   
   
   
   07.07.2022 By Shanny Basar

[![MarketsMedia](https://articles.marketsmedia.com/hubfs/MarketsMedia.svg "MarketsMedia")](http://marketsmedia.com)

- [About us](https://www.marketsmedia.com/about-us)
- [Careers](https://www.marketsmediagroup.com/careers)
- [Contact](https://www.marketsmediagroup.com/contact)
- [Advertise](https://www.marketsmediagroup.com/advertise)
- [Newsletter](https://awards.marketsmedia.com/newsletter-sign-up)
- [Corporate Site](https://marketsmediagroup.com)

<https://www.facebook.com/MarketsMedia/> <https://twitter.com/marketsmedia> <https://www.linkedin.com/company/markets-media-llc> <https://vimeo.com/marketsmedia>

- © 2026 Markets Media Holdings LLC
- - Terms & Conditions
    - Privacy Policy

 {{ standard\_footer\_includes }}