Infrastructure

10:25 AM
Greg MacSweeney
Greg MacSweeney
Commentary
Connect Directly
Facebook
Google+
LinkedIn
Twitter
RSS
E-Mail
50%
50%

The (Cloud) Tipping Point

Trusted financial services vendors are grabbing the cloud market away from the Amazons and Googles of the cloud world.

While consumers have been quick to move to cloud-based services and technology, the financial industry, collectively, has been one of the slower adopters. Until now.

Pressured by mounting costs, increasing regulation and stringent e-discovery requirements, financial firms are quickly transitioning from in-house archiving and compliance solutions to hosted solutions, according to a study from Forrester Consulting and commissioned by Bloomberg Vault, a service that helps corporations meet compliance, regulatory and e-discovery requirements.

Notably, the large cloud players, such as Amazon EC2 and Google, are not the cloud providers who are gaining financial services market share. Instead, financial firms are turning to technology providers and partners they already know, such as Bloomberg (which is basically a cloud, or and ASP, or both, depending on your definition), NYSE Euronext (it's new data centers are secure and ready for hosting) and other vendors with established Street cred.

In fact, one of the chief complaints from CIOs across financial services is that large cloud vendors either do not care about the compliance and regulatory requirements financial institutions face, or they don't completely understand the depth of oversight regulators have. In the end, many firms turned away from generic cloud vendors and began to develop their own private clouds. And now, firms are turning to trusted, industry-specific cloud providers.

Clouds Are Rolling In Fast

The rapid uptake and interest in hosted cloud offerings mirrors cloud technology activity in other areas. For instance, the upcoming Capital Markets Cloud Symposium on May 17, already has over 250 financial services professional attendees registered and will be almost twice as large as similar one-day events Wall Street & Technology has hosted in previous years, including events focused on red-hot topics such as low-latency trading.

More than half of the Forrester survey's 187 financial services respondents expect to use hosted compliance solutions by 2012. Mounting costs associated with increased regulatory requirements is one of the major reasons firms are shifting to hosted, or cloud, solutions. More than 60 percent of the respondents, who have compliance and archiving responsibilities, say that their shift to cloud-based solutions is driven by the promise of lower total cost of ownership (TCO), faster deployments and easier management than on-site deployments, according the Forrester study.

Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio
Previous
1 of 2
Next
Comment  | 
Print  | 
More Insights
More Commentary
One Size Fits Nobody in End User Services
How building profiles from employees' roles and behaviors can help optimize your end user services.
'Enlightened' Non-IT Execs More Likely To Run Secure Organization
Do senior executives understand their role in data security? On the whole, unsurprisingly, no.
No Screwups, Please, We’re Banks
Changing a bank's culture is not going to happen overnight, but having the right tools and levers in house will surely make a big difference over time.
You’re Doing BYOD Wrong: These Numbers Prove It
Almost 40% of users who connect personal mobile devices to corporate networks have no lock-screen mechanism set in place.
Citibank Brazil Deploys Award-Winning BPM Solution: Now What?
Citibank Brazil automated commercial customer onboarding and reduced cycle time by 70%. But how can a global organization harness the successes of its islands of solutions?
Register for Wall Street & Technology Newsletters
White Papers
Current Issue
Wall Street & Technology - Elite 8, October 2014
The in-depth profiles of this year's Elite 8 honorees focus on leadership, talent recruitment, big data, analytics, mobile, and more.
Video
7 Unusual Behaviors That Indicate Security Breaches
7 Unusual Behaviors That Indicate Security Breaches
Breaches create outliers. Identifying anomalous activity can help keep firms in compliance and out of the headlines.