Rearchitecting the Capital Markets: The Cloud Cometh

by Arin Ray,  Brad Bailey, May 25, 2017
Vendor Reviews
Global

Abstract

The cloud is the solution the capital markets need.

Celent has released a new report titled Rearchitecting the Capital Markets: The Cloud Cometh. The report was written by Brad Bailey and Arin Ray, both with Celent’s Securities & Investments practice.

Cloud-based models are transforming capital markets. The report examines where major transformation is taking place, and how market participants and solution providers are utilizing the cloud to create new models for market data, trading, risk, and operations.

As the capital markets move forward, cloud is proving to be a great enabler in creating an automated, data-centric, AI future. The cloud has emerged to solve many of the current challenges, such as cost pressure, lack of scalability, flexibility, and innovation. It offers firms a more agile infrastructure that enables them to address ever-evolving regulatory requirements and the proliferation of trading applications, as well as the need to rapidly connect to multiple liquidity sources.

The implications for core IT infrastructure are profound. The cloud model is becoming the blueprint for infrastructure transformation across the front, middle, and back offices. In parallel, the capital market space is seeing a need for better connectivity. Private, dedicated cloud access is better suited for capital market requirements, offering better speed and latency as well as superior performance and security.

The public cloud is also gaining traction in strategically chosen functions and segments. The cloud cuts the cost of failure and allows firms large and small, as well as fintech providers, to test alternative business models in a low-risk manner.

“Saving money is only the starting point with the cloud. The end game is a new type of data-centric, analytically robust capital market firm,” commented Bailey, a Research Director.

“The cloud sits at the center of all major trends we see today in the capital markets: cost reduction, focus on core, automation, operational efficiency, data primacy, analytics, and machine learning,” added Ray, an Analyst.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

2

 

About this Research

2

Introduction

3

Models for Delivery and Distribution in the Capital Market

4

 

Evolution of the Capital Market Cloud

4

 

Value Chain on Cloud

5

 

How Participants Are Leveraging the Cloud

6

 

Sell Side

6

 

Buy Side

7

 

Market Intermediaries

9

 

Software Vendors and Service Providers

9

 

Key Capital Market Public Cloud Providers

10

Capital Market Use Cases

12

 

Data Distribution

12

 

Trading Tech as a Service

15

 

Post-Trade Solution

17

 

Risk and Compliance Solutions

19

Forecasting Cloud Adoption: All Clear for More Cloud

21

 

Barriers to More Cloud

21

 

Competitive Shifting

21

 

The Journey to Cloud Nine

21

Leveraging Celent’s Expertise

23

 

Support for Financial Institutions

23

 

Support for Vendors

23

Related Celent Research

24

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