This is an extract from ‘Automation, Resiliency and Agility: Key Drivers of Cloud Adoption and Strategy,’ a Finextra Research impact study in association with Calypso, part of the AWS Cloud Series.

A survey of financial services firms’ cloud attitudes conducted by bobsguide in 2020 revealed that nearly 83% of participants were already working on the cloud, with 50% expanding their use and the rest of the respondents having already completed their cloud migration.

Financial institutions in the global capital markets space are facing unprecedented regulatory scrutiny, IT rationalisation, and cost pressures while still having to deliver value to their clients, which has shifted the spotlight on cloud from innovative or experimental initiatives to mission-critical workloads that can be made leaner and less expensive to maintain.

While cloud has become a common mode of delivery for innovative capital markets firms, recent financial pressure, global macro-economic uncertainty and the need to respond to regulatory change has led to cloud adoption and migration being integrated and considered a crucial part of a financial institution’s business strategy in optimising mission-critical workloads with cloud technology. In this impact study, we discuss the key drivers of cloud adoption, as well as strategies that ensure successful outcomes for customers who want to make the move to cloud.

Investing in cloud

Technical strategy must be aligned with business strategy to ensure that processes are running smoothly and financial services firms can effectively manage their business in the face of increasing market volatility.

Today, economic uncertainty has accelerated the move to cloud and financial leaders must tap into the opportunity to improve trading risk management and post-trade processing. Not surprisingly, the survey found that close to 90% of participants have said that the pandemic is causing them to be more likely to invest in moving to the cloud, with nearly half of respondents saying that this investment is already underway. After all, resiliency and protection from maintenance issues or outages are top priorities when it comes to financial services customers.

The definition of ‘investing in cloud’ has shifted: when migrating to cloud, financial institutions are investing in technical upgrades and enhanced processes but are also investing to increase their business agility and are training staff so they can evolve with market developments.

This shift in the motivation and method of cloud adoption is visible from the types of workloads that are supported on cloud today. Trading and risk applications, as well as back office, represent more than half of the workloads of financial services cloud adopters, with reporting and other workloads following close behind as key applications in the cloud. These are not experimental side projects in dev environments, but core functionalities that are crucial for the day-to-day business of financial services customers.

Once capital markets firms have migrated, the cloud’s agility allows teams to focus on business goals, respond to regulatory change and mitigate vulnerabilities at a faster rate, rather than losing valuable time managing IT infrastructure.

Agility is key

While becoming more agile is not a change that can be made overnight, the combination, of microservices, REST APIs and Kubernetes on a SaaS based interface means that providers like Calypso are able to continuously help capital markets firms develop their technology stack and modernise not just point solutions, but full business functionality.

Prior to cloud deployment, deployment of enterprise solutions were bespoke implementations that varied due to the unique technology infrastructures found at financial services firms. Cloud infrastructure on AWS allows the standardisation and the dynamic scalability of technology infrastructure. AWS automation is of paramount importance to a clear cloud strategy and in turn, a successful business that anticipates customer demand.

Alongside this, automating full deployment of the tech stack from top to bottom guarantees resilience on cloud and each customer is highly unique within their data centre. AWS allows a more uniform infrastructure backplane that allows for increased automation, speed, and efficiency—and therefore greater agility. This, in turn, allows capital markets firms to reallocate resources to higher value-added tasks, instead of infrastructure, making them more responsive to market and customer needs.

As an early adopter of cloud in the financial services, Calypso started shifting workloads to the cloud over a decade ago in anticipation of customer demand. Further, a collaboration with cloud providers such as AWS and technology firms such as Calypso is necessary to leverage the full-functionality, mission critical platforms that they are providing. Calypso is leveraging AWS infrastructure and automation tooling such as AWS CloudFormation to fully automate the deployment of Calypso, and its associated infrastructure, within a DevOps pipeline.

What are the key drivers of cloud adoption?
- Cost optimisation by sizing, according to need
- Agility and automation: speed up cloud provisioning with infrastructure as code
- Resiliency, adaptability and scalability

Click here to read ‘Automation, Resiliency and Agility: Key Drivers of Cloud Adoption and Strategy.’