Taking a hybrid approach to cloud migration for financial markets

The adoption of cloud-based applications and services in the financial markets sector continues to gather pace, across the front, middle and back office.

Cloud adoption in capital markets grew by 30% in 2020, according to a study from PwC and AFME (Association for Financial Markets in Europe)^[1]. And that growth is likely to continue, particularly in the wake of the global pandemic, which has forced many firms to accelerate their cloud migration strategies.

The cloud can of course offer clear benefits to financial institutions. One of the most often cited is cost reduction, particularly through optimisation of infrastructure. Other benefits include the speed of deployment of cloud-based services, the improved user experience and convenience, the elasticity and scalability that cloud provides, the availability of DevOps environments, and the interoperability and open nature of cloud-based applications. So, it’s not surprising that firms are increasingly looking to capitalise on these benefits.

However, transitioning to the cloud isn’t easy, particularly in the complex financial markets environment. It’s important to secure exec sponsorship too, which is beneficial to the migration journey.

Firms shouldn’t underestimate the costs and complexity of migrating their technology stacks to the cloud, particularly when attempting to perform the migration themselves. Many firms have built up a complex mesh of infrastructure to support their analytics, pricing, trading, risk, settlement, and other operational functions. It’s highly unrealistic to expect to be able to just ‘lift and shift’ these functions to the cloud.

A critical early step in the cloud transformation journey, is for firms to clearly map out their appropriate cloud strategy. That means working out where to use public cloud, where to use private cloud, and which applications and data need to remain in-house or on-premises. High-performance trading and real-time market data technologies, for example, are unlikely candidates for the public cloud, whereas data analytics, regulatory reporting and end-user applications may be more appropriate for cloud-hosted platforms.

Implementing their strategy doesn’t have to be onerous, however. The process can be greatly streamlined by working with an infrastructure provider that’s already done the groundwork and offers an integrated solution for accessing all the required endpoints, through a single, secure network.

Connectivity is key. Secure and reliable connectivity to trading partners, counterparties, application service providers, and multi-cloud environments, giving firms the ability to rapidly deploy whatever they need, including cloud-based services, managed hosting, and connectivity to global market centres.

Adopting this approach enables forward-looking firms to benefit from the best of all worlds. Having a tailored cloud environment with unified, secure access to a combined infrastructure of on-premise, hosted, private cloud, public cloud, and cloud of clouds, all in a managed environment, allows firms to adopt the cloud strategy that is right for their business and their customers.

BT Radianz can offer a complete hybrid, managed solution. If customers wish to keep certain applications and data under their own control, we can offer Infrastructure as a Service (IaaS) including data centre space, servers, racks, power and all the associated resources to enabling a fully managed service to the OS level.

Alternatively, we can provide secure managed connectivity into all the major public cloud service providers (including AWS, Azure, Google Cloud, AliCloud and others), financial organisations, exchanges and application providers. All fully secured and encrypted through the BT Radianz network.

Find out more about BT Radianz and hybrid cloud services by getting in touch with your account manager.

^{[1] https://www.afme.eu/Portals/0/AFME_TechnologyInnovation_FINAL.pdf?ver=2020-11-13-135131-297}