AFME Promotes Cloud Adoption for Capital Markets
The Association for Financial Markets in Europe (AFME) has released a new paper which highlights the minimal use of the cloud among capital markets firms - with over two-thirds of AFME members questioned estimating that only 1 - 10% of their bank’s current workload was using some level of public cloud.
AFME sets out 14 recommendations to increase adoption. The recommendations aim to increase the transparency and collaboration required to build further confidence, trust and capability in public cloud.
James Kemp, Managing Director, Head of Technology and Operations at AFME, said: “The use of public cloud in financial services offers significant opportunities and benefits for all parties. However, to realise these and increase adoption it is vital that the whole industry, including banks, cloud providers and regulators, continue to collaborate. This includes ensuring the knowledge, skills, security and risks are appropriately assessed and identified throughout this long-term transformation.”
Public cloud is expected to expand significantly across all areas of capital markets, but the paper outlines several barriers to adoption, including legacy IT complexity, security implications, regulatory concerns, a lack of standardisation in cloud provider services, and long-term considerations on concentration risk.
AFME highlights four key themes -
1. Banks should design their public cloud strategy with a clear and realistic target operating model, review and reprioritise accordingly, and ensure executive sponsorship throughout adoption.
2. Cloud providers must continue to engage with banks and regulators to support building the capabilities and assurances required (e.g. legal, regulatory, privacy), and support increased standardisation that can also satisfy regulatory requirements.
3. Regulators can support greater regional and global harmonisation, in respect to requirements for both public cloud adoption and supervisory practices, that will reduce the complexity for banks adoption.
4. The industry as whole must continue to share knowledge, best practice, and promote standardisation and consistency, in how public cloud is adopted.