February 19, 2025 — More than a third of all applications and services from banks and financial market infrastructures (FMIs) have been moved to the cloud.
For more than 20 years, companies around the world have been migrating to the cloud. Banks and FMIs have lagged behind other companies and industries in this transition, due largely to concerns about security and compliance. In recent years, however, technology innovation has helped allay many of those concerns, allowing banks and FMIs to take fuller advantage of the cloud.
The benefits of cloud computing have long been clear to both banks and FMIs. Banks know that migrating to the cloud can help enhance flexibility and speed time to market. FMIs can reap the same benefits, in addition to the confidence created by the cloud’s uninterrupted availability.
“While lowering costs is certainly a driver of cloud migration, our research shows it is not the foremost consideration for banks and FMIs,” says David Easthope, Senior Analyst for Crisil Coalition Greenwich Market Structure & Technology and author of Cloud adoption by financial market infrastructures. “Instead, banks and FMIs recognize the operational and strategic advantages offered by cloud and now feel confident enough in maturing cloud technology to take the plunge.”
Compliance Costs and Risk Management
Despite this new confidence, about 40% of banks and FMIs experience operational risk and compliance issues related to cloud adoption. These institutions together spend an estimated $1.2 billion per year on cloud compliance costs.
Although the CIOs and CTOs who drive decision-making about technology architecture express strong trust in their cloud partners, most banks and FMIs are using multi-cloud approaches for greater business continuity
“When it comes to selecting their cloud providers, banks and FMIs place a top priority on providers’ demonstrated ability to respond quickly to disruptions, as well as their reputation and ability to support critical workloads,” says David Easthope.
Cloud adoption by financial market infrastructures presents the results of a special study, in collaboration with Red Hat, in North America and Europe on the use of cloud computing by banks and FMIs, and the challenges these institutions face in balancing innovation with risk management and compliance. The report analyzes cloud migration among banks and FMIs, focusing on the drivers of cloud adoption, technology decision-making within institutions, relationships with cloud providers, operational risks, and compliance issues and costs.
