A growing number of firms are looking to put key front-office functions onto cloud computing platforms, according to research from Celent and Colt.
A study of cloud uptake found an increasing acceptance of the technology, particularly among the buy-side who are more open to service-based models and alread have experience using hosted solutions for many of their functions, including their trade management.
Sell-side acceptance has been slower as banks have generally preferred to have full control of their systems. However, banks are looking to improve their distributions models which could be done via the cloud. They are also keen on creating private clouds for key resources.
Celent said while in the past cloud tech has been mostly used in non-core and non-proprietary data environments, but is now being considered for front office functions as more firms grow comfortable with the security of the cloud. RegTech, market data services and new trading technologies are also expected to move to the cloud in the near future.
Brad Bailey, research director at Celent, said: “The barriers to cloud adoption are no longer based on a mistrust of the technology, but rather how to successfully deploy a solution that complies with regulations, and these concerns are common to all technology solutions, cloud-based or not. In many cases the public cloud is now more secure than on premise systems and we are seeing institutions alter their attitude from ‘never’ to ‘how to’ embrace the cloud.”