The View is Clear—The Forecast is for Cloud Adoption in Financial Services

For years, the promise of cloud in financial services seemed just out of reach. Conference panels touted its benefits, C-level executives pushed “cloud-first” strategies, and major cloud vendors predicted that investment banks would soon follow the path of digital transformation.

Yet, actual adoption remained slow. Cloud providers may have underestimated the complexities of financial markets, assuming they could replicate their success from other industries.

Challenges Hindering Cloud Adoption

One common excuse for slow adoption was that “turkeys don’t vote for Christmas,” implying resistance from technology executives. However, this view ignored the financial sector’s ruthless cost-cutting mindset. The real issue lay in stringent regulations, risk aversion, and industry-specific challenges.

Banks needed reassurances on IT security, data sovereignty, and migration risks. They also required solutions for exchange data distribution, multicast connectivity, and seamless integration with legacy systems. Simply “lifting and shifting” existing infrastructure was never a realistic approach.

Legacy software also struggled with cloud fail-over models, reducing the potential benefits. Many financial firms found it impossible to deploy outdated technology in a cloud environment.

A Turning Point for Cloud in Financial Services

Despite initial resistance, cloud adoption is now accelerating across capital markets. While private cloud instances have gained traction, public cloud adoption faced more challenges.

However, poor return on equity (ROE) in financial services is driving a shift in mindset. Banks are increasingly seeing cloud not as a risk but as a competitive necessity. No longer afraid of being first movers, firms now fear missing out.

Cloud providers have also worked hard to address security, data sovereignty, and performance concerns. Tools and out-of-the-box solutions now mitigate IT security risks.

The Rise of Incremental Cloud Adoption

Rather than migrating entire legacy systems, financial firms are now embracing incremental cloud adoption. Smaller, well-defined projects can deliver measurable ROI far quicker than large-scale “rip and replace” initiatives.

Third-party services via public cloud are also driving adoption. Many financial firms now prefer consuming cloud-based SaaS and managed services over maintaining costly in-house systems. This shift reduces total cost of ownership, minimises full-time employee (FTE) headcount, and converts capital expenses (CapEx) into operational expenses (OpEx).

Cloud’s Role in Market Data and Risk Management

Market data is one of the most obvious use cases for cloud in financial services. Vendors and exchanges are moving high-volume static datasets, such as tick history, to cloud platforms. However, challenges remain with real-time streaming data.

Risk management and post-trade systems are also seeing increased cloud adoption. But what about trading technology, where performance and security concerns are most pressing?

Cloud in Trading Technology: The Next Frontier

While performance remains critical for high-frequency trading (HFT) and direct market access (DMA), many other areas of the trade lifecycle can benefit from cloud’s agility and scalability.

Most traditional fund manager order flow involves care or algorithmic orders, which do not require ultra-low latency execution. Here, cloud-based infrastructure can significantly improve cost efficiency and operational flexibility.

Transforming Order Routing with Cloud

Order routing networks should improve efficiency by ensuring electronic order delivery via FIX for automated processing through E/OMS. However, existing proprietary networks are costly and slow to onboard new clients or order types.

A secure public cloud order routing network, with VPN or FIX over TLS (FIXS) connectivity, could handle the majority of non-HFT flow, drastically reducing costs.

Additionally, third-party trading apps and desktops are increasingly cloud-delivered, yet buy-side and sell-side firms could move far more of their electronic trading infrastructure to the public cloud.

This could include data capture for compliance reporting, regulatory obligations, and even core sell-side trading infrastructure for agency broking operations.

RA Platform: Cloud-Ready Trading Technology

RA Platform is designed for cloud, on-prem, and hybrid deployments. This flexibility allows firms to meet performance demands today while aligning with future technology strategies.

Even for firms not yet ready to fully commit to cloud, hybrid compatibility delivers significant benefits. This includes cost-effective testing, UAT environments, disaster recovery, and business continuity solutions.

Public Cloud and the Future of Financial Markets

Not every electronic trading use case will move to public cloud, but major vendors like Microsoft Azure are investing heavily in network performance. This will challenge traditional network providers on latency-sensitive workflows.

By targeting specific areas within the trade lifecycle, firms can cut costs, remove management overhead, and improve margins while freeing up resources for innovation.

Ultimately, financial firms must choose trading technology that offers deployment flexibility—whether on-prem, in private cloud, or across hybrid environments. The right infrastructure must support scalability, performance, and future-proofing.

Conclusion: The Inevitable Shift to Cloud

CIOs and CTOs must strike a balance between performance, service levels, and cost efficiency. Cloud in financial services is no longer an “if” but a “when.”

Both sell-side and buy-side firms are embracing cloud to reduce costs and optimise operations. Public cloud adoption is accelerating, and financial institutions that fail to adapt risk falling behind their competitors.

The future of capital markets is cloud-powered, and firms that seize this opportunity will gain a critical competitive advantage.