Cloud computing has revolutionised how financial institutions operate, enabling unprecedented capabilities in risk management, data processing and market responsiveness. 

As major banks migrate core operations to the cloud, they're discovering strategic advantages beyond cost savings, from real-time analytics to enhanced regulatory compliance. 

This roundtable explores how cloud technologies are reshaping the financial landscape whilst addressing critical challenges in data sovereignty and infrastructure resilience.

Our distinguished panel includes:

• Dean Clark, Chief Technology Officer at GFT
• Barath Narayanan, Global BFSI and Europe Geo Head, Persistent Systems
• Richard Harmon, VP and Global Head of Financial Services at Red Hat
• Satya Samal, IBM Partner & Cloud Leader for FSS, UK
• Alasdair Anderson, VP of EMEA at Protegrity
• Ramandeep Singh, Head of Cloud Engineering for Financial Services at Capgemini
• Nelson Wootton, CEO and Co-Founder, SaaScada

Question 1: How has cloud migration transformed risk management and real-time analytics in financial institutions? What capabilities were previously impossible?

Dean Clark, Chief Technology Officer at GFT

Cloud migration has enormously impacted risk management in financial services institutions. These technological advances have enabled scalable, high-performance computing that was previously unattainable. 

By utilising cloud-native architectures, financial services organisations are now able to process huge datasets in real-time, apply advanced AI-driven risk models and predictive analytics to perform a number of key tasks, detect fraud, optimise liquidity and enhance regulatory compliance. 

Previously, legacy infrastructure limited risk calculations to overnight batch processing. Now, real-time scenario simulations and stress testing are instant. 

The cloud’s elasticity and resilience also enable firms to dynamically scale risk functions, integrate diverse data sources and respond to market shocks with unprecedented agility.

Barath Narayanan, Global BFSI and Europe Geo Head, Persistent Systems

Cloud-hosted risk management solutions enable financial institutions to optimise risk modelling, portfolio analysis and fraud prevention by processing extensive data for complex simulations and advanced deep learning. 

Cloud infrastructure facilitates real-time data handling, thereby improving the accuracy of risk models, depth of analytical insight and efficiency of decision-making processes. 

Cloud platforms provide exceptional scalability, allowing institutions to manage peak loads and expand computational resources as needed without substantial capital investments. 

Additionally, AI-enabled cloud-based risk management solutions can detect patterns and anomalies that may indicate potential risks or fraudulent activities, empowering institutions to proactively address threats before they escalate, safeguarding assets and ensuring regulatory compliance. 

Enhanced security measures provided by cloud service providers ensure the protection of sensitive data through encryption, access controls, and continuous monitoring. 

This transformation has shifted risk management from a reactive function to a proactive strategy, empowering financial institutions to mitigate threats before they materialise and transform data into strategic assets.

Richard Harmon, Vice President and Global Head of Financial Services at Red Hat

Both banks and financial market infrastructures (FMIs) move applications and services to the cloud as much for greater flexibility or time to market as for cost reduction.  

Cloud environments provide firms with the scalability and flexibility to support on-demand real time analytics that is critical for intraday risk management during periods of excessive market volatility.  

This provides firms with the ability to accelerate responses and update models that improve their ability to manage risk exposures that protect not only the institution but its institutional customers as well.

Question 2: With major banks moving core operations to the cloud, how are they managing data sovereignty and regulatory compliance across different regions?

Dean Clark, Chief Technology Officer at GFT

Data sovereignty or data jurisdiction is a highly complex challenge in the cloud world. Working with many of the largest banks in the world, at GFT, we are yet to see any silver bullet that completely solves this challenge. 

The prevailing strategies involve a mix of replicated infrastructure with locally hosted applications and data, as well as hybrid models that retain sensitive datasets on-premise in mandated jurisdictions. 

Some institutions have tried complex cloud architectures, with a central cloud-hosted controlling application delegating functionality and queries down to child instances located where needed. 

This approach has had mixed results, with the key challenges of continued maintenance and upgrades of the application meaning slower code releases and longer testing cycles.

Satya Samal IBM Partner & Leader for Cloud in FSS, UK at IBM

This is indeed a massive challenge and IBM Consulting is helping banks address these topics through multi-pronged approach. 

Our hybrid cloud architecture helps by distributing data across on-premises and public cloud and making sure that PII data are transferred to the public cloud. We are working with hyperscalers to keep data inside the country based on regulatory requirements. 

Data masking and tokenisation is another mechanism to ensure data is secured and not accessible without appropriate security clearance. Hyperscalers have also launched sovereign cloud solutions to address these issues.

Alasdair Anderson, VP of EMEA at Protegrity

Banks are leveraging multi-cloud and hybrid strategies to comply with jurisdictional regulations while maintaining operational efficiency. 

Many adopt data tokenisation and privacy-enhancing technologies (PETs) to de-risk sensitive information before storing or processing it in the cloud. 

Additionally, regulatory frameworks like GDPR, PSD2, and local banking laws are driving “sovereign cloud” solutions, where cloud providers offer region-specific compliance architectures. 

These local clouds are becoming more readily available as different jurisdictions enforce data localisation. 

Question 3: Could cloud computing make traditional data centres obsolete in finance, or will hybrid models remain essential for critical banking infrastructure?

Dean Clark, Chief Technology Officer at GFT

Traditional datacentres aren’t disappearing anytime soon. Instead, at GFT, we’re seeing most of our customers adopt hybrid infrastructures. 

They are selectively moving workloads to the cloud where it makes sense from a cost, scalability and management perspective. At the same time, they are keeping complex legacy applications or lower cost on-premise workloads where they are.

Critical banking infrastructures, especially systems with strict latency, regulatory or security requirements, still benefit from the control and predictability of on-premise data centres in some cases. 

While cloud will continue to expand and add functionality to ease migration for more and more applications, hybrid models remain essential for balancing innovation with operational resilience in tier 1 financial services institutions.

Barath Narayanan, Global BFSI and Europe Geo Head, Persistent Systems

While cloud computing fosters agility and innovation, traditional data centres remain vital for financial services, especially for mission-critical tasks like high-frequency trading and core banking systems that necessitate low-latency, high-security environments. 

Maintaining private infrastructure can also be cost-effective for high-volume transactions or specialised workloads. 

However, the cloud will continue to expand its footprint, particularly for non-core services, and offer new opportunities for innovation, operational efficiency and scalability in the financial sector. 

Hybrid models are expected to be the preferred strategy, addressing legacy systems, regulatory compliance, and data sovereignty issues. 

Financial institutions can leverage cloud computing for analytics, customer applications, and innovation while maintaining sensitive and high-risk operations on-premise. 

Regulatory requirements further reinforce the need for this balance, ensuring data control and operational resilience. 

The future seems to be a mix of both worlds: cloud for flexibility and scalability, alongside on-premises or private data centres for critical and sensitive functions, creating a more adaptive and secure financial ecosystem.

Richard Harmon, Vice President and Global Head of Financial Services at Red Hat

Hybrid cloud is the reality today and will continue to be because financial firms need choice, particularly with DORA in place. 

No different from how organisations use multiple operating systems or database technologies depending on the use case, they will continue to adopt a mix of hosting environments – including owned data centres, leased spaces, managed service providers (MSPs) and public cloud platforms. 

A hybrid approach – especially with a consistent, common management layer or platform – enables businesses to use whichever infrastructure makes sense at the time, giving  flexibility, resilience and adaptability to go where the business needs. 

Question 4: How has cloud elasticity changed the way financial institutions handle market volatility and peak trading periods compared to traditional infrastructure?

Ramandeep Singh, Head of Cloud Engineering for Financial Services at Capgemini

The ability to scale up and down is one of the most powerful and differentiating features offered by cloud platforms. Traditionally, financial institutions over-provisioned hardware and infrastructure to cover for occasional spikes and peak times. 

This approach led to a lot of idle capacity during non-peak hours and created bottlenecks during unexpected loads and surges.

With cloud elasticity, financial institutions are now able to provision appropriately and plan for scaling up and down as needed. 

They can handle higher volumes due to surges, market announcements, holiday seasons, and more in a cost-effective manner. 

Elasticity also enables certain applications and workloads, such as real-time data streaming and processing, real-time risk calculation, advanced fraud analysis, real-time portfolio adjustments, market surveillance, and large-scale data lakes.

For example, financial institutions benefit from higher compute capability during holiday seasons, scalability during high lending cycles like student loans during college admissions, and more. 

This capability allows the financial services industry to perform better capacity planning, on-demand scaling and handle market volatility more effectively and cost-efficiently.

Alasdair Anderson, VP of EMEA at Protegrity

Cloud elasticity has redefined the ability to scale computational resources during volatile market conditions. Previously, institutions had to over-provision infrastructure for peak loads, leading to inefficiencies. 

Now, with auto-scaling and serverless computing, firms can dynamically allocate resources in response to real-time demand. 

This elasticity is particularly valuable in high-frequency trading and stress testing scenarios, ensuring that infrastructure constraints never hinder execution speed or capacity.

Question 5: Beyond cost savings, what unexpected benefits have financial institutions discovered after moving to the cloud? What strategic advantages has it enabled?

Ramandeep Singh, Head of Cloud Engineering for Financial Services at Capgemini

Adopting cloud technologies and platforms correctly can bring cost savings, but there are additional benefits that often overshadow the cost advantages. 

Cloud platforms can offer strategic advantages such as:

• Reducing time to market and boosting competitive differentiation
• Accelerating experimentation and innovation
• Providing sandbox environments for testing and readiness
• Enabling rapid prototyping
• Faster processing of transactions and analytical workloads, resulting in better insights and customer value
• Better fraud detection
• Higher resiliency for operations and applications
• Minimal downtime and better disaster management
• Facilitating global expansion, open banking and integrated ecosystems

Barath Narayanan, Global BFSI and Europe Geo Head, Persistent Systems

Financial institutions have realised key strategic advantages beyond cost savings after migrating to the cloud. 

Cloud platforms have improved agility by enabling rapid deployment of new products and services, fostering innovation through serverless architectures and AI/ML tools like AWS SageMaker and Google Cloud AI, enabling rapid deployment of new trading algorithms and fraud detection models. 

Real-time data processing and advanced analytics have enhanced decision-making and risk management capabilities during market volatility. 

Cloud infrastructure’s scalability has facilitated global expansion, allowing institutions to quickly provision resources in new markets and ensure localised services with low latency.  

Built-in redundancy, automated failover and disaster recovery have strengthened business continuity and minimised downtime. 

Advanced security features like IAM and encryption services simplify compliance with industry regulations. 

Cloud architectures enable open banking and embedded finance via seamless API integrations with fintech platforms. 

Additionally, cloud-based collaboration tools allow global teams to work seamlessly across unified platforms, fostering efficiency and faster decision-making. 

Cloud has become a strategic enabler of growth, differentiation and long-term competitiveness.

Alasdair Anderson, VP of EMEA at Protegrity

I would challenge the assumption that moving to the cloud is a cost saving. The biggest benefit is faster innovation cycles and the ability to rapid scale or burst processing beyond on-premise capacity. 

Cloud-native and hybrid architectures enable financial firms to deploy and test new services more rapidly, shortening time-to-market for digital banking products. 

Additionally, the democratisation of AI and analytics has allowed even mid-sized institutions to leverage advanced risk models and fraud detection systems, capabilities once exclusive to only the biggest banks. 

Question 6: As quantum computing develops, how might cloud providers adapt their services to support financial modelling and cryptography needs of the future?

Ramandeep Singh, Head of Cloud Engineering for Financial Services at Capgemini

Advancement in quantum computing will significantly reshape IT services, protocols and applications, impacting cloud platforms as well. 

The hyperscalers have already started investing in this area and are launching services to enable quantum computing. IBM Quantum , Amazon Braket and Microsoft Azure Quantum and Microsoft Majorana are few examples of such services. 

Quantum computing is expected to revolutionise financial modelling and analysis. With the easy availability of quantum computing and resources on cloud, financial institutions will be able to adopt and integrate these features into their applications. 

Cloud providers are also expected to provide hybrid solutions that blend traditional computing with quantum computing, enabling applications to combine proven traditional models and new quantum models.

Quantum algorithms also challenge currently used encryption and cryptography solutions. It is essential to develop quantum-resistant protocols to reduce this risk. 

Cloud providers are developing stronger quantum-ready encryption algorithms and post-quantum cryptography standards.

We are not very far away from a scenario where a quantum compute capability will outperform hundreds of data centres, and it will fit into the palm of our hand.  

Satya Samal IBM Partner & Leader for Cloud in FSS, UK at IBM

We are already seeing rapid progress in this space. IBM Quantum Safe is an end-to-end solution designed to protect banks from future quantum threats to classical cryptography. 

It is already available on IBM Cloud. Similarly, cloud providers are providing Quantum Computing as a Service. 

Many of our hyperscaler partners: AWS, Azure, GCP and IBM Cloud are already doing this. Many clients have started to use these services to start their organisation is quantum adoption pathway.

Nelson Wootton, CEO and Co-Founder, SaaScada

In reality, we are still at least a decade away from quantum computing being available and accessible to the mainstream market. However, its potential to utterly revolutionise computing can’t be understated.

Quantum computing is likely to entirely change the way we communicate, with the potential for entangled qubits – an infinite space apart – able to share information in terms of state. 

Furthermore, there are some things that quantum computing is uniquely positioned to revolutionise. For example, much of today's cryptography relies on complex mathematical problems. 

The brute forcing of a solution to these problems is possible, but using today's computing approach would take hundreds or even thousands of years to run through all the possible permutations to find a solution and, therefore, decrypt some encrypted information. 

Quantum computing though is capable of approaching these kinds of problems in an utterly revolutionary way and able to simultaneously try many solutions at once, thereby massively shortening the time it would take to brute force a cryptographic problem – potentially making today's cryptographic approaches obsolete.

However, right now, the environment needed to create an operating quantum computer is incredibly delicate, requiring a number of elements to be held at very close to absolute zero temperatures. 

This, in turn, means that although this type of computing is coming, it will probably only be available via cloud-style providers renting out time on quantum computers run by these institutions. 

Much like the early days of computing, when mainframe computers were offered in a similar way. But over time (probably decades), this will become more accessible, cheaper and available to a wider audience.

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