Going Public: Firms Embrace Public Clouds
What will it take to get financial firms to completely buy in to public clouds?
Regulation is a unique thing, as it can create the need for innovation or stop it right in its tracks. Look no further than the adoption of public clouds in the capital markets, as compliance requirements have served as a double-edged sword for those looking to make the move.
When I first joined Waters almost two years ago, I was tasked with looking at where IT budgets were trending. What I found was that, for the most part, firms’ budgets were stagnant at best. The regulations written following the financial crisis were coming into effect and firms were scrambling to make sure they had the necessary systems in place to remain compliant. To put it lightly, budgets were spread thin.
I spoke to Chris Perretta, who was State Street’s CIO at the time, for the story, and he mentioned his interest in getting involved in a public cloud. He openly admitted to not considering it an option back in 2010. However, the technology had improved and the benefits in terms of scalability were just too good to turn down at a time when every dollar in a firm’s budget mattered so much.
Testing the Waters
Fast forward nearly two years and a majority of firms are at least dipping their toes in a hybrid-cloud environment. RBC’s Bruce Ross, this month’s cover story, was vocal about his interest in moving his firm’s workloads into a hybrid-cloud environment.
But there are still those who are hesitant when it comes to migrating to a public cloud. Coincidentally, it was while I was in Canada this past June that I heard the other side of the public cloud argument. A panel at this year’s Toronto Financial Information and Technology Summit touched on what was holding back some firms from getting involved with a public cloud.
Interestingly enough, it had nothing to do with technology, as one panelist went as far as to say that the vendor’s technology in the space was light years ahead of what was being produced internally. The problem arose in the regulatory space. Damian Smith, director of infrastructure strategy at TD Bank, questioned what regulators’ expectations were and what kind of audit rights firms had.
It’s a true dilemma, as regulators can’t set a precedent without any past cases, and firms are timid about getting involved because no precedent has been set.
Stuck in the middle are large cloud providers like Amazon and Google. Often, these vendors aren’t willing to provide customers with a complete view of where their data sits, according to Dennis Cote, a former vice president of infrastructure planning and engineering at Toronto-based bank CIBC, complicating things even more.
Ready to Go
Something’s got to give—and soon—as firms are primed to make the move to a public cloud. According to a Tabb Group report written by Monica Summerville and Terry Roche, widespread adoption of public clouds within the capital markets can be expected within the next two to five years, with “significant decisions to be made around cloud adoption” done this year.
The report, A Look Through the Keyhole on Cloud Adoption Within Capital Markets, surveyed C-level executives and heads of businesses on the buy and sell side and at exchanges.
So, with the majority of the industry believing in the benefits of the public cloud model, where do we go from here? As big and powerful as public cloud vendors are right now, I think the opportunity that lies within financial services is too great to pass up. I think they’ll end up bending at the knee, to a degree, to appease the concerns of firms.
Regulators also need to step up to the plate and clarify issues pertaining to capital markets firms using public clouds. Putting things in writing and defining what is and isn’t needed from a public cloud vendor would likely alleviate some of the industry’s concerns. As I said, sometimes it takes a little bit of regulation to help innovation.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Regulation
Consolidated tape hopefuls gear up for uncertain tender process
The bond tapes in the UK and EU are on track to be authorized in 2025. Prospective bidders for the role of provider must choose where to focus their efforts in anticipation of more regulatory clarity on the tender process.
Fighting FAIRR: Inside the bill aiming to keep AI and algos honest
The Financial Artificial Intelligence Risk Reduction Act seeks to fix a market abuse loophole by declaring that AI algorithms do not have brains.
Waters Wrap: The rise of AI washing… and regulation washing?
The SEC recently levied fines against two investment advisors over “AI washing”. Anthony takes issue with the announcement.
Prepare now for the inevitable: T+1 isn’t just a US challenge
The DTCC’s Val Wotton believes that firms around the globe should view North America’s move to T+1 as an opportunity—because it’s inevitable.
European firms prime for lopsided settlement in North America and at home
With T+1 imminent in North America and increasingly likely to traverse the Atlantic, operations and trading professionals in Europe are fighting on two fronts.
As crypto ETFs become reality, benchmark providers take center stage
The SEC’s approval of the first spot bitcoin ETFs will expose a growing number of traditional market participants to the maturing world of crypto data, a moment that some—such as CF Benchmarks, BlackRock’s benchmark provider—have been eagerly awaiting.
Waters Wavelength Podcast: Looking into the EU regulatory landscape
Eflow’s Ben Parker joins the podcast to discuss EU regulations.
FCA declines to directly regulate market data prices
A year-long investigation by the UK regulator to determine whether competition is hindered in the wholesale data markets has concluded with its decision not to directly regulate much-maligned data pricing and licensing structures.
Most read
- Women in Technology & Data Awards 2024: All the winners and why they won
- Witad Awards 2024: Above and beyond award (vendor)—Susan Bennett, Tradeweb
- Fighting FAIRR: Inside the bill aiming to keep AI and algos honest