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 the capital markets value chain, with AFME members identifying the key benefits being greater business agility and innovation, improved cost management and efficiency, and enhanced client experience and service offerings.
However, the paper outlines several barriers to this adoption at present, including legacy IT complexity, security implications, regulatory concerns, a lack of standardisation in cloud provider services, and long-term considerations on concentration risk, among others.
In order to support continued public cloud adoption, AFME proposes 14 recommendations for banks, cloud providers, regulators, and the industry as a whole, with 4 key themes emerging:
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.