The Cloud Comes of Age in Capital Markets: All Clear for More Cloud

by Arin Ray,  Brad Bailey, December 12, 2016
Industry Trends


Celent has released a new report titled The Cloud Comes of Age in Capital Markets: All Clear for More Cloud. The Colt-sponsored report was written by Brad Bailey and Arin Ray, both with Celent’s Securities & Investments practice.

The appetite for cloud-based services in capital markets has reached a critical point and cloud is set to become the main delivery model for certain key functions in the near future.

Cloud adoption is being driven by four key factors in the capital markets: cost pressures, flexibility in creating new and rapid solutions, demand for flexible infrastructure and managing and leveraging data in the most effective fashion possible. These factors are further driven by regulatory challenges, macroeconomic uncertainty, and the rise of fintech. The cloud has emerged to solve these challenges, offering firms a more agile infrastructure that enables them to address ever evolving regulatory requirements and the proliferation of trading applications as well as the need to rapidly connect to multiple liquidity sources.

There has been a wider acceptance for moving non-core and non-proprietary data to a cloud environment, the move of front office functions and proprietary or client information has lagged behind. However, this attitude is shifting as firms become more comfortable with the performance and security of the cloud.

The capital market space is also seeing a parallel emergence of the need for better connectivity to support secure cloud deployments. Private, dedicated cloud access is better suited for capital market requirements, offering better speed and latency as well as superior performance and security.

“The conversations around cloud adoption are quickly moving beyond security, to  performance and how best successfully deploy a solution that complies with regulations, and these concerns are common to all technology solutions, cloud-based or not. We are seeing institutions alter their attitude from ‘never’ to ‘how to’ embrace the cloud,” says Bailey, a Research Director.

“Whenever there is a need to build new solutions or replace existing ones, we invariably see cloud being the most preferred model because of low costs of failure, and high flexibility and scalability of the cloud. This should lower the barriers for legacy migration in the longer run paving the way for greater cloud adoption,” says Ray, an analyst.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

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Table of Contents

Executive Summary



Key Findings



Key Research Questions



About this Research





A Brief Overview of Cloud Models


Models for Delivery and Distribution in the Capital Markets



Cloud Service Models



Cloud Deployment Models



Cloud-Based Managed Service


Cloud Acceptance in the Capital Markets


Reaching the Cloud: Connectivity and Accessibility






Private Network



Managed Connectivity Service


Capital Market Use Cases



TradingTech as a Service



RegTech as a Service



Market Data as a Service


Challenges in Cloud Adoption and the Way Forward



Overcoming the Challenges




Leveraging Celent’s Expertise



Support for Financial Institutions



Support for Vendors


Related Celent Research


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