The UK’s Financial Conduct Authority (FCA) became one of the first regulators to publish guidelines on the use of cloud technology earlier this month.
Alongside the guidelines, TABB Group has released a research report which suggested widespread adoption of the technology is likely by 2018.
Mounting IT costs, and the “tremendous expenditure associated with achieving regulatory compliance,” are behind the industry shift TABB said.
By 2018, the capital markets sector will see widespread adoption of cloud technology, the research report said.
The FCA’s guidelines explained it will support its use in the same way it supports outsourcing services, meaning responsibility is not shifted when cloud technology is implemented.
The regulator also wants assurance that operational risk will not increase once cloud technology is introduced.
Head of FinTech research at TABB Terry Roche, explained the benefits behind cloud technology are clear.
He said: “Whether the technology solution is big data, blockchain or machine learning, the enabling technology behind it is the cloud.”
“Cloud enabled services can help to realise significant operational efficiencies and over time provide enhanced business insight and services,” TABB added.