Capital markets firms to ramp up public cloud spending

Companies in the investment sector will be spending almost half their IT budgets on public cloud technology by the end of next year as they seek to gain access to more sources of data to help them make better business decisions, research has found.

According to interviews with senior IT executives at 250 capital markets companies, ranging from small hedge funds to large banks, public cloud investments will consume 47% of IT budgets by 2019. This compares with 30% in 2017.

The interviews, carried out by data provider Thomson Reuters, also revealed that a quarter of the firms expect to mostly use public cloud for accessing market data within a year. Almost all (90%) said they would do so within four years.

These firms are driven by data to help them make the right investments, support regulatory reporting and automate back-office processes. Through the public cloud they can access more public data.

“The cloud offers a powerful set of tools for the financial community to manage their data needs, and opens up new opportunities to combine public and proprietary data at massive scale with tools like AI [artificial intelligence] and machine learning to solve any number of problems,” said Brennan Carley, global head of enterprise proposition and product for the financial and risk business at Thomson Reuters.

“Financial firms of all sizes can be more agile and innovative using the cloud, as they test investment strategies and enter new markets more quickly,” he added.

Carley said financial firms had been cautious about using public cloud because of the sensitivity of the data they use, as well as the demands from industry regulators they face, but the latest findings show they are accelerating cloud plans.

“The adoption curve may differ depending on whether it’s a small hedge fund or a large bank, and whether they are using the data to make trading decisions in real time or back-testing research hypotheses, but the end point is clear: financial firms say they are starting to leverage the cloud across their market data infrastructure to help them move faster, grow their business, reduce their costs and better manage their risks,” he said.

Earlier this month, Thomson Reuters announced it was making its real-time data accessible in the cloud.