Business Applications

Fragmentation and resulting complexity has developed in Capital Markets over many years, as new systems were bolted onto existing architecture, or processes developed without standards. This has created today’s significant requirement for manual processing, copying and reconciling of data between systems and firms. 

To achieve straight-through processing Capital Markets players are looking to re-platform applications in the cloud, introduce SaaS applications, or to create an API environment to surround legacy applications to allow modern digital platforms to be introduced. 

Containerisation of legacy applications will be a necessary step in the large-scale migration of workloads to public cloud and allow workloads to shift across a hybrid multi-cloud architecture.

Compute & Cloud

By their very nature digital platforms leverage hyperscale infrastructure from cloud providers in computing, data storage and security to deliver scale, reliability and customer experience. Capital Markets players were slow to adopt cloud due to security and regulatory concerns, but adoption is now growing fast. Nasdaq is moving its 28 markets in North America and Europe to the public cloud over the next decade and already has it's data warehouse on Amazon Web Services (AWS) [1]. Refinitiv has signed a partnership agreement with Microsoft which will see its new products and go-to-market services powered by the tech giant’s Azure cloud [2].

There will be a major shift toward cloud as the primary venue for workloads over the next few years, with public cloud IaaS and PaaS serving as the primary environment for  workloads. A 2022 survey suggests that 15% of workloads have migrated to the cloud, up from 8% in 2021 [3]. 44% cited the main benefit of adopting cloud as being the enhanced ability to automate processes, while 40% cited the enhanced ability to develop new products and services [4] Security & Compliance risk, Legacy infrastructure, complexity of change and lack of cloud skills are the main barriers to further adoption. 

Multi-cloud architectures are seen as key to delivering agility, cost and performance while addressing security and compliance challenges. Eventually, container-driven application portability in a hybrid or multi-cloud IT architecture will enable the multi-directional movement of workloads to best execution venues on an ongoing basis for optimisation of cost and application performance. Unsurprisingly, 81% believe a multi-cloud strategy will become a regulatory prerequisite after several years of regulatory focus on cloud technologies in the UK and the US [5]. Skill shortages are key inhibitor with banks seeking cloud platform, security and machine learning expertise.

Digital Workplace

Organisations must now provide a digitally enabled, flexible and collaborative working experience to attract and retain staff. They must also move beyond the fast reactions required to achieve a lockdown, where over 70% worked from home [1], and deliver an ongoing hyrbid working environment.

A modern collaborative digital workplace is critical to a remotely located workforce. It ranges from access to HR applications and core business applications to e-mail, instant messaging and enterprise social media tools and virtual meeting tools.

Security, Compliance & Data Privacy

Security especially with data breaches is high priority issue. Consumers and businesses  expect banks to operate at a very high level of security and privacy, this includes identity management, data security, privacy management and cybersecurity.

Delivering this across a hybrid cloud and remote working environment is challenging given the ever-increasing number of attack surfaces. Most banks will spend at least 10% of their total budget on cybersecurity [1]. A considerable portion will go to cloud security, reflecting the shift to cloud-based business models.

In 2021, 63% of financial institutions experienced an increase in destructive attacks, an increase of 17% from the previous year [2]. In 2022, Akamai Security Research observed a colossal 3.5x growth in web application and API attacks against financial services. In 2022, DDoS targets increased by 22% in the financial services industry [3]. Most recently the European Banking Authority (EBA) had to shut down its entire email system after an attack on its Microsoft Exchange servers.

According to IBM’s Cost of a Data Breach 2022 report, data breaches against financial services, which is considered “critical infrastructure,” has an average cost of $5.97 million, about 75% more than the similar costs for other organizations [4].   

Blockchain offers the essential capability to store data in a tamper proof manner while making it accessible among various stakeholders. It provides transparency and data traceability while preventing fraud at the same time. Current security concerns include the risks associated with attempts to manipulate a ledger, and to introduce fraudulent data, and with cyber-attacks threatening the integrity and availability of a platform.