Floating in the Capital Markets
Cloud: Moving Beyond Data Storage
May 2014
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©2014 Aite Group LLC
Agenda
• Survey background
• Report highlights
• Conclusion
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©2014 Aite Group LLC
Agenda
• Survey background
• Report highlights
• Conclusion
Page 3
©2014 Aite Group LLC
Aite Group interviewed 21 mostly brokerdealers globally…
Breakdown of Respondents
(n=21)
Exchange/ATS
5%
Asset manager
10%
Brokerdealer/investment
bank
85%
Source: Aite Group survey of 21 capital markets participants, March and April 2014
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©2014 Aite Group LLC
Survey firms represented global operations
Q. You firm currently operates in...
(n=21)
86%
76%
71%
52%
48%
48%
33%
Developed Developed
Asia-Pacific Europe
North
America
Emerging Emerging
Europe Asia-Pacific
Latin
America
Middle
East/Africa
Source: Aite Group survey of 21 capital markets participants, March and April 2014
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©2014 Aite Group LLC
Surveyed firms were also active users of
multiple asset classes…
Q. Does your firm currently use...
(n=21)
90%
90%
86%
86%
86%
86%
81%
Source: Aite Group survey of 21 capital markets participants, March and April 2014
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©2014 Aite Group LLC
Agenda
• Survey background
• Report highlights
• Conclusion
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©2014 Aite Group LLC
Industry focus on regulations, cost, and
clients…
Primary Strategic Technology Investment Drivers for Business in 2014
(n=21)
Regulatory compliance
81%
Cost control
71%
Client support
62%
Internal efficiency
improvement
52%
Geographic expansion
support
29%
Source: Aite Group survey of 21 capital markets participants, March and April 2014
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©2014 Aite Group LLC
Even split between cloud adopters and
doubters
Q. Does your firm currently have cloud initiatives in place?
(n=21)
No
48%
Yes
52%
Source: Aite Group survey of 21 capital markets participants, March and April 2014
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©2014 Aite Group LLC
Of the cloud adopters, preference for private
or hybrid approach
Type of Cloud Services In Use
(n=11)
Combination of
both
36%
Public cloud
37%
Private cloud
27%
Source: Aite Group survey of 21 capital markets participants, March and April 2014
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©2014 Aite Group LLC
Concerns over security still a major obstacle
for most firms considering cloud
Concerns about Cloud Initiatives
(n=10)
Other
10%
Regulatory restrictions on
data storage
30%
Reliability and availability
30%
Performance issues
40%
Lack of control
50%
Concerns over security
90%
Source: Aite Group survey of 21 capital markets participants, March and April 2014
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©2014 Aite Group LLC
For those cloud doubters, good chance they
will embrace cloud services over the next 24
months
Q. Chances that your firm will leverage cloud services over the next 24
months
(n=10)
Highly likely
10%
No chance
20%
Likely
30%
Somewhat likely
40%
Source: Aite Group survey of 21 capital markets participants, March and April 2014
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©2014 Aite Group LLC
Scalability and TCO reduction key to cloud
adoption
Q. Rank the importance of benefits that you may get from the cloud
(n=11)
Moving from
capex to opex
4
High availability
3
Faster time to
market
2
System
scalability
2
2
4
4
Disasterrecovery and…
Reducing TCO
3
2
4
2
5
3
3
3
Not important
5
7
Important
Very important
Source: Aite Group survey of 21 capital markets participants, March and April 2014
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©2014 Aite Group LLC
Cost reduction key driver for cloud-based
data initiatives
Q. Which factors have or are likely to influence your use of cloud
technology for data?
(n=21)
Cost reduction
48%
Desire to rationalize data feeds/vendor…
29%
Strategic data quality related programs
29%
Client data focused initiatives
29%
Migration from legacy systems
24%
Regulatory initiatives
24%
Risk management function support
19%
Coping with a greater variety of…
Strategic consolidation post-merger
19%
10%
Need for a more structured approach to…
Other
10%
10%
Source: Aite Group survey of 21 capital markets participants, March and April 2014
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©2014 Aite Group LLC
Cloud adoption moving from data storage
and management to more computeintensive areas…
Areas of Focus for Cloud Initiatives
(n=11)
Reference or market data
management
Positional or transactional
data storage
64%
36%
Other*
36%
Strategy development and
testing
27%
Trading infrastructure
27%
Trade analytics
18%
Risk management
18%
Regulatory compliance
18%
Quantitative research
9%
*Other includes email, call
center, HR, legal, technical projects, etc.
Source: Aite Group survey of 21 capital markets participants, March and April 2014
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©2014 Aite Group LLC
How to leverage the cloud for data
management
Q. Which aspects of data management in the cloud offering are the most
important for your firm?
(n=21)
Scaling to meet future requirements
62%
Operational risk control
48%
Providing better monitoring tools and data…
48%
Facilitating global data integration
29%
Basic support for key reference data sets…
29%
Adequate downstream support
14%
Other
10%
Support for bitemporality
5%
Providing a better front end
5%
Source: Aite Group survey of 21 capital markets participants, March and April 2014
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©2014 Aite Group LLC
Data management and trade analytics,
continued focus of the future
Future Focus Areas for Cloud Initiatives
(n=21)
Reference or market data
management
43%
Trade analytics
29%
Positional or transactional
data storage
24%
Quantitative research
19%
Other (Please provide)
19%
Risk management
19%
Regulatory compliance
14%
Strategy development and
testing
14%
Trading infrastructure
5%
Source: Aite Group survey of 21 capital markets participants, March and April 2014
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©2014 Aite Group LLC
The appeal of cloud for data managers
• A rapid way to reduce costs via the removal of duplicative
processes at an enterprise level and the elimination of the
requirement to support internally deployed software and
hardware
• Predictability in ongoing costs
• Scalability in dealing with a higher volume of data in a
timely fashion without requiring internal investment
• Ability to have a centralized point for the metering and
permissioning of data vendor feeds across an enterprise—
a way to rationalize data feeds and improve vendor
management via increased transparency of consumption
at an enterprise level
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©2014 Aite Group LLC
Agenda
• Survey background
• Report highlights
• Conclusion
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©2014 Aite Group LLC
Conclusion
• Regulatory compliance, cost control, and client
management are the top three drivers for strategic IT
investment
• Focus on cost savings, scalability and facilitating high
performance computing key drivers for cloud adoption in
capital markets
• Market participants are looking to leverage cloud-based
services for data management and increasingly in risk
management and trade analytics.
• Data as a Service (DaaS) is the growing concept that data
is provided on-demand to the end user and the service
provider is responsible for all data cleansing and
management functions.
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©2014 Aite Group LLC
Aite Group: Partner, Advisor, Catalyst
Aite (pronounced “eye-tay”) Group is an independent research and
advisory firm focused on business, technology, and regulatory issues
and their impact on the financial services industry.
Virginie O’Shea
Sang Lee
+1.617.338.6050
www.aitegroup.com
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©2014 Aite Group LLC