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February 12, 2018
Capital markets are banking on the cloud Making the move to Cloud: Part 1 of 3
By: Steve Murphy and James Burrows

In this first blog in a three-part series, we look at reasons for capital markets firms to move to the cloud; we also examine the business case. Part 2 looks at management and optimization issues in the move to cloud. Part 3 discusses how to create a value-led roadmap.

Capital markets are banking on the cloud

To move or not to move to cloud? For today’s banks, that is no longer the question.

It’s certainly true that, among our clients, capital markets institutions have been relatively cautious cloud adopters. However, leading firms are now seeing the cloud as a way to drive competitive advantage:

  • Increased agility

  • Access to disruptive technologies that enable innovation

  • Technology operating efficiencies

  • Reduced infrastructure costs

More specifically, cloud capabilities can enhance and improve day-to-day functions such as:

  • Risk calculations (using leading tools such as artificial intelligence and machine learning)

  • Sales and trading

  • Trade and post-trade settlement and enablement

  • Pricing and data management

  • Reconciliation support

  • Finance and corporate functions

 

No cakewalk
Challenges? Sure. For banks, the journey to cloud means navigating a challenging risk, regulatory and compliance landscape. Regulations still vary from region to region. At most banks, multiple internal functions and teams have to get involved in cloud approvals, which creates a complicated tapestry of stakeholders. And banks considering an off-premise cloud transition must wrestle with issues relating to data, architecture, system interfaces and IT security.

But in an environment of low interest rates, narrow margins and increased capital requirements, banks are seeking ways to simplify, innovate and improve time to market. And all roads lead to cloud.

Thinking differently about IT
Most investment banks that are looking toward a cloud-enabled future are also thinking about IT and operations differently. They recognize the need to shed current IT arrangements in which they build and operate their own information supply chains. They’re preparing to compete more aggressively by differentiating value through cloud-powered proprietary services, processes, algorithms and data.

For every business, regardless of industry, success through cloud means rapidly adopting operating models and IT systems with a pragmatic, value-driven, cloud-first, “Everything-as-a-Service” mentality. It means modernizing legacy technologies to support business processes far along the commoditization curve.

Cloud needs to be seen as a driver of innovation-innovation that can propel competitive advantage

 
 


Risk management and security
Our research shows capital markets institutions also embracing cloud as part of a broader strategy to adopt a proactive, fluid approach to risk management. In addition, forward-looking firms that turn to public cloud solutions are rapidly discovering previously unexpected advantages, such as heightened security.

Making the case
To help drive insight into your cloud savings and benefits, Accenture leverages a vigorous financial model that considers key elements such as budget, P&L, cash views and costs associated with ramping down legacy apps.

Indeed, the potential cost savings alone represent a strong argument for cloud. But for investment banks, cloud adoption is part of a broader strategy toward effective digital innovation. Moving to cloud requires a clear tactical vision, strong governance, durable processes and intelligent delivery technology. With these elements in place, capital markets firms can accelerate operations and improve a range of functions—from how they conduct modeling, analysis and integration to how they detect anomalies.

Honing their focus
Across our own engagements, we’re seeing a number of investment banks honing their focus on cloud adoption to address legacy technologies, operate in an unpredictable economy and modernize their IT landscapes. They’re seeking a total cost of ownership commensurate with corporate revenues.

But cloud is not simply a cost play. For many capital markets firms, cloud is a revenue-enablement play that removes historical IT constraints on speed of provisioning, and compute and storage limitations.

Learn more about what’s driving capital markets to Cloud.

Next up: Managing and optimizing


Related Pages

Journey to Cloud

Cloud Services

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